Pharmaceutical company Endo International files for bankruptcy

Endo International has filed for bankruptcy to limit liability from lawsuits related to opioid addiction and reduce billions of dollars of debt.

In conjunction with the filing, Endo agreed with state attorneys general to give up to $450 million to state and local governments, ban the promotion of Endo's opioids and require Endo to turn over millions of documents related to its role in the opioid crisis for publication in a public online archive.

The pre-arranged bankruptcy of the pharmaceutical company was filed Tuesday night in the U.S. Bankruptcy Court for the Southern District of New York. A pre-arranged bankruptcy is filed with the support of creditors.

The maker of Percocet and other drugs will put itself up for sale and sell itself in a $6 billion credit bid that will swap debt for equity in the company unless it gets a better offer. Endo formerly made Opana, an opioid pain medication that the Food and Drug Administration requested to be removed from the market in 2017 after concluding that the benefits of the drug may no longer outweigh its risks.

Endo's India-based entities are not part of the Chapter 11 proceedings. The company expects to file recognition proceedings in Canada, the United Kingdom and Australia.

By addressing the more than $8 billion of debt that have burdened our balance sheet and establishing 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, we will be able to move forward as a new endo and reach our full potential, CEO Blaise Coleman said in a statement.

Endo warned last week that a bankruptcy filing was imminent and that the company was in constructive talks with creditors.

The company had $8.1 billion of net debt as of June 30 and didn't make certain interest payments when they came due on June 1 while it negotiated with creditors. Endo also had $1.19 billion of unrestricted cash, including $78.4 million in settlement funds for opioid related matters.

Endo faced 15 opioid-related lawsuits filed by states, 2,570 by local governments and Native American tribes, 310 by hospitals, health systems, unions, health and welfare funds or other third-party payers, and approximately 220 cases filed by individuals.

Other companies have addressed claims related to opioid addiction this year.

Purdue Pharma filed for Chapter 11 bankruptcy in September 2019 and had its settlement approved by a bankruptcy court in March. The founding Sackler family agreed to pay $6 billion to help fund opioid trusts.

Teva Pharmaceutical Industries announced in July that they would pay $4.25 billion for claims, plus $100 million for Native American tribes. The figure includes up to $1.2 billion to supply its generic version of the life-saving medication, Narcan, at wholesale prices.

Walgreens agreed in May to pay $683 million for all claims related to the company's pharmacies in the state.

In February, AmerisourceBergen, Cardinal Health and McKesson agreed to pay $21 billion as part of a settlement with Johnson Johnson, who will add $5 billion.