Are J&J, Endo and Allergan in line for 'global' opioid settlements?

With thousands of opioid lawsuits piling up in a Cleveland courthouse, drugmakers and plaintiffs seemed at an impasse on how to move forward. Now, empowered by Endo and Allergan’s deals with two Ohio counties, all parties could be rushing to the table to discuss terms.

Johnson & Johnson is the latest drugmaker to join settlement talks with state attorneys general and a Cleveland judge covering a 2,000-plaintiff-strong multidistrict litigation on opioid charges, NPR reports. Allergan and Endo have also reached "tentative" global deals of their own, a source told NPR.

Spokespersons for Endo and Allergan could not be reached for comment Thursday.

"The Company remains open to viable options to resolve these cases, including through settlement," J&J said in a Monday statement.

The newest round of talks follows settlements inked last week totaling $16 million between Allergan and Endo with two Ohio counties. The cheaper-than-expected deals were seen by analysts as a bellwether for the Cleveland suits and opened the doors for drugmakers to come to the table for deals of their own.

On Wednesday, Purdue Pharma, the maker of Oxycontin, announced it was "actively working" toward a global settlement, reportedly offering between $10 billion and $12 billion. Under a potential settlement, Purdue would declare bankruptcy and the billionaire Sackler family who owns the company would give up control of the drugmaker, Reuters reported. 

A Purdue representative said the company is "prepared to defend itself vigorously in the opioid litigation" but has "made clear that it sees little good coming from years of wasteful litigation and appeals."

The settlement hopes have also roped in Ohio’s AG Dave Yost, who said after Endo and Allergan’s county deals last week that the drugmakers weren’t off the hook on statewide charges.

On Thursday, Yost’s office confirmed that it was in discussions with Purdue on a potential settlement but didn’t say whether it intended to settle with Endo or Allergan.

Cantor Fitzgerald analyst Louise Chen has said Endo’s settlement could represent a way "out of the woods" for drugmakers and offers a breath of fresh air for companies facing the prospect of bankruptcy.

The $11 million deal Endo signed, extrapolated out to the full Cleveland litigation, would indicate a $1.8 billion liability, SVB Leerink analyst Ami Fadia said. That's a far cry from the firm's the original estimate of around $4 billion. It’s also good news for Allergan—which agreed in principle to a roughly $6 million deal with the same counties—as well as Amneal and Mylan.

Settlement prospects are less clear for J&J, which earlier this week was handed down a $572 million verdict in its bench trial against the state of Oklahoma.

Fadia said the verdict could have a limited readthrough for the Cleveland litigation because of the case's unique circumstances, including limited defendants. Fadia made the same argument for Teva, which settled for $85 million with Oklahoma to avoid trial.

With J&J planning to appeal the verdict, an actual penalty could take years to nail down, effectively washing away the verdict’s effect on other lawsuits.

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