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Why Endo International Stock Is Skyrocketing Today

By Keith Speights - Oct 16, 2019 at 12:05PM

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Investors are excited about the potential for a settlement in opioid litigation.

What happened

Shares of Endo International (ENDP -39.67%) were 22.6% higher as of 11:38 a.m. EDT on Wednesday. The big gain came on speculation that a settlement could be at hand related to multiple opioid lawsuits involving Endo.

Drugmakers Johnson & Johnson and Teva Pharmaceutical are reportedly offering multibillion-dollar settlements in opioid cases. Drug wholesale distributors AmerisourceBergen, Cardinal Health, and McKesson are also negotiating potential settlements.

Wood blocks like dice spelling "Deal" with a question mark and a persons's fingers turning one block from "no" to "yes"

Image source: Getty Images.

So what

A reasonable settlement to end its opioid-related headaches would be fantastic news for Endo. The drugmaker has already announced settlements of opioid lawsuits with two Ohio counties.

Despite all of the buzz over other pharmaceutical companies and drug distributors proposing deals to settle opioid litigation, though, Endo hasn't announced any new developments. And the company's name hasn't been mentioned as a party to any potential deals in recent reports.

As such, investors probably shouldn't become too enthusiastic that a comprehensive settlement is near for Endo. It could happen, but at this point, all we have are rumors -- and rumors that don't yet involve Endo itself.

Now what

It's now a waiting game to see what happens with all of the buzz about potential settlement deals. If J&J and Teva are successful in reaching agreements that aren't too costly and put the opioid issues largely behind them, the odds that Endo will be able to follow in their footsteps will improve.

Until there's something more concrete, however, investors are better off staying on the sidelines with Endo. Investing in pharmaceutical stocks involves enough risks without throwing in the possibility of a multibillion-dollar payout to settle litigation.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson and McKesson. The Motley Fool has a disclosure policy.

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Endo International plc Stock Quote
Endo International plc
ENDP
$0.40 (-39.67%) $0.27

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