Endo International, one of the nation's larger opioid makers and with U.S. headquarters in Malvern, filed for bankruptcy protection in Manhattan on Tuesday, beset by $9.5 billion in total debt and threatened by thousands of opioid lawsuits.
Best known for the pain killer Percocet, Endo expanded its portfolio with branded and generic pain pills after the popularity of the opioid OxyContin, made by Purdue Pharma. Endo has been caught up in massive and costly plaintiffs litigation that also led Purdue and Mallinckrodt PLC, another pain pill maker, to file for bankruptcy.
Endo said it has reached a restructuring agreement with creditors to reduce billions of debt through a Chapter 11 bankruptcy reorganization. The company, based in Ireland for tax purposes but effectively run out of Malvern, also said in a statement that it will establish voluntary trusts funded with $550 million over 10 years to settle opioid claims in the lawsuits.
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Walter Taggart, emeritus law professor at Villanova University and a bankruptcy expert, said that with the bankruptcy, "all litigation stops" and now the "goal is to determine what can be salvaged" of Endo. Taggart said the opioid pharmaceutical companies face a legal and financial crisis similar to that faced by the asbestos companies over the last three decades.
Endo may have to increase the $550 million for opioid plaintiffs in the bankruptcy negotiations, Taggart said. Court documents show that Endo faces more than 2,000 lawsuits filed by states and cities and other entities. Philadelphia is one of the cities.
The Centers for Disease Control and Prevention estimates that about 500,000 Americans have died in the opioid epidemic that dates to 1999, involving those who took prescription and illegal opioids. Endo voluntarily withdrew its Opana ER pain pills from the market in 2017 after the Food and Drug Administration asked it to because of the dangers of abuse. Opana's active ingredient was oxymorphone.
Blaise Coleman, Endo's president and chief executive officer, said in a statement that the agreement with debt holders "is a significant milestone as we advance our strategic priorities and business transformation."
He added that the bankruptcy process establishes a "pathway to closure with respect to the thousands of opioid-related and other lawsuits that the company has been defending at an unsustainable cost."
The agreement envisions the debt holders bidding to purchase Endo for what they are owed, beginning at $6 billion, and offering jobs to Endo's employees, the statement said. A regulatory filing said that Endo employed about 3,000. The company did not respond to a question about how many staffers report to the Malvern offices.