Endo International plc (NASDAQ:ENDP) has agreed to pay a $10 million USD settlement in a landmark opioid case, boosting Endo stock 17%.
Fueling the Opioid Crisis?
The settlement stems from a lawsuit brought against Endo International and fellow drug manufacturer Allergan plc (NYSE:AGN), by two Ohio counties that have accused various drug manufacturers from fueling the US opioid crisis. Both companies were due to go to trial in October, but have now avoided that court date following today’s settlement. Endo confirmed that it will pay $10 million USD in damages to the counties of Cuyahoga and Summit, as well as provide both counties with up to $1 million USD worth of its diabetes and allergy drug products at no cost.
Endo Stock Soars
The decision by the company to avoid trial was well met by investors, as Endo stock soared over 17% during early Tuesday trading. While the pending trial hung like a dark cloud over Endo, which has seen over 85% of its share value wiped clean this year, speculators will be hoping that the company can now put this behind them as the stock looks towards recovery. Endo’s chief legal officer, Matthew Maletta, called the settlement a “favorable outcome” and stressed its value should not be extrapolated to any other opioid-related cases.
Endo International also states that the settlement is not indicative of the company’s admission of wrongdoing. The company withdrew its painkiller Opana ER from the market in 2017 amidst accusations that drug manufacturers had deceptively marketed opioids in a manner which understated their harmful risks. Opioids accounted for over 400,00 overdose deaths between 1997 and 2017, and there are currently 2,300 pending lawsuits by state and local governments against drug manufacturers.
While Endo stock looks out of the woods, for now, the opioid crisis has hampered shares across the drug manufacturing industry. Investors in Endo shares will be keeping a keen eye on the development of other cases, such as McKesson (NYSE:MCK) and Johnson & Johnson (NYSE:JNJ), which will go to trial on October 21. With the damaging implications of the opioid crisis, and with senior political figures such as 2020 hopeful Bernie Sanders making regular accusations against big pharma, only the more risk inclined investors would take a chance on Endo stock.
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