Endo International Plc agreed to an $11 million settlement to avoid going to trial in the first federal court cases targeting opioid makers and distributors over the public-health crisis caused by the painkillers.
Endo said Tuesday it will pay $10 million and donate $1 million of diabetes and allergy drugs to resolve claims by two Ohio municipalities that the company helped fuel the U.S. opioid epidemic by illegally marketing its Opana painkiller. The deal resolves only two cases set for trial in October and leaves intact lawsuits against Endo filed by more than 2,000 local governments over its handling of Opana. The October trial will still proceed against other drugmakers.
The settlements come as a judge in Oklahoma is set to rule next week on whether Johnson & Johnson must pay as much as $17 billion to reimburse the state for tax dollars spent fighting the opioid epidemic. The case is the first designed to hold a drugmaker liable for the fallout from opioid addiction and overdoses.
Endo officials said the Ohio settlement didn’t reflect what it expects to pay to resolve the other opioid suits. “The cash portion of the settlement approximates the estimated cost to Endo of proceeding through trial,” Matthew Maletta, Endo’s executive vice president and chief legal officer, said in an emailed statement.
News of the settlement rallied Endo shares, sending them higher by as much as 33% in New York trading Tuesday. The company’s stock closed up more than 18 percent to $3.02. Other companies named in other opioid suits, including Allergan Plc, Teva Pharmaceutical Industries Ltd. and Mallinckrodt Plc also gained. Endo’s bonds due 2025 and 2023 spiked on the news, rising between 4 and 6 cents on the dollar to 62 and 67.75 respectively on Tuesday, according to Trace bond trading data.
Representatives for Teva and Mallinckrodt didn’t immediately respond to requests for comment on potential settlements. The Wall Street Journal reported Monday that Irvine, California-based Allergan was in talks to settle the two Cleveland cases for about $5 million. Allergan officials declined to comment on the newspaper’s report…