Shares of Endo International (NASDAQ:ENDP) were soaring 27.3% higher as of 11:21 a.m. EDT on Tuesday. The drug stock jumped 13% yesterday on speculation that settlement of an opioid-related lawsuit could be on the way. Endo confirmed Tuesday morning that it had reached a settlement in principle for two Ohio lawsuits collectively known as the "Track 1 Cases."
Investors were relieved that there appears to be an end in sight to the lawsuits filed by the Ohio counties of Cuyahoga and Summit. They were perhaps even happier with the specific terms of the settlement in principle.
Endo stated that it will pay a total of $10 million with the settlement in principle to the plaintiffs. The drugmaker will also provide up to $1 million of its Vasostrict and Adrenalin products free of charge, with these products to be allocated and distributed by Cuyahoga and Summit counties. In addition, should there be a comprehensive resolution of all the other ongoing government-related opioid claims, Endo agreed to pay the two Ohio counties the amount they would have received with that resolution less the amount they'll receive with the current settlement in principle.
There's another plus for Endo and its shareholders with the settlement in principle as well. It will include "no admission of wrongdoing, fault or liability of any kind" by Endo or its subsidiaries.
Matthew Maletta, Endo's executive vice president and chief legal officer, said that "this is a favorable outcome for the company." He's right. Endo seems to be getting out of the Track 1 Cases relatively unscathed.
It's great for Endo shareholders that the company has some good news for a change. However, the volatility of Endo stock isn't likely to go away anytime soon. This isn't the end of opioid litigation for Endo by any stretch.
Approximately, 18 other cases have been filed by or on behalf of states, 131 by individuals, 153 by hospitals, health systems, unions, and other third-party payers, and 2,300 by cities, counties, Native American tribes, and other government-related entities. Maletta cautioned that the amounts agreed to in the settlement in principle for the Track 1 Cases shouldn't be "extrapolated to any other opioid-related cases or claims."