UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
_______________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): September 30, 2014 (September 30, 2014)
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ENDO INTERNATIONAL PLC
(Exact Name of Registrant as Specified in Its Charter)
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Ireland | 001-36326 | Not Applicable |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
33 Fitzwilliam Square, Dublin 2 Ireland | Not Applicable |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code 011-353-1-669-6634
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 8.01. | Other Events. |
As previously disclosed, since 2008, AMS, and more recently, in certain cases the Company or certain of its subsidiaries, have been named as defendants in multiple lawsuits in various federal and state courts, as well as in Canada, Scotland, and the UK alleging personal injury resulting from the use of transvaginal surgical mesh products designed to treat POP and SUI. Plaintiffs in these suits allege various personal injuries including chronic pain, incontinence and inability to control bowel function and permanent deformities. On February 7, 2012, a multidistrict litigation (MDL) was formed, and cases pending in federal courts are now consolidated in the Southern District of West Virginia as part of MDL No. 2325. Similar cases in various state courts around the country are also currently pending.
As previously disclosed AMS and certain plaintiffs’ counsel representing mesh-related product liability claimants have entered into various agreements in principle, which were ultimately memorialized in Master Settlement Agreements (MSAs) to resolve up to approximately 21,700 filed and unfiled mesh claims handled or controlled by the participating counsel. The agreements in principle and MSAs were entered into solely by way of compromise and settlement and are not in any way an admission of liability or fault by the Company or AMS.
As of September 30, 2014, AMS has entered into additional MSAs with plaintiffs’ counsel to settle up to approximately 20,000 additional filed and unfiled mesh claims handled or controlled by the participating counsel, including the vast majority of claims covered by settlement negotiation tolling agreements. The Company expects that these additional agreements will settle substantially all of AMS’s known U.S. mesh claims. Like the prior MSAs discussed above, these new MSAs were entered into solely by way of compromise and settlement and are not in any way an admission of liability or fault by the Company or AMS.
All MSAs discussed above, are subject to a process that includes guidelines and procedures for administering the settlements and the release of funds, and have participation thresholds requiring participation by the vast majority of claims represented by each law firm. If certain participation thresholds are not met, then AMS will have the right to terminate the settlement with that law firm. In addition, one agreement gives AMS a unilateral right of approval regarding which claims may be eligible to participate under that settlement. To the extent fewer claims than are authorized under an agreement participate, the total settlement payment under that agreement will be reduced by an agreed-upon amount for each such non-participating claim. Distribution of funds to any individual claimant is conditioned upon a full release and a dismissal of the entire action or claim as to all AMS parties and affiliates. Prior to receiving funds, an individual claimant shall represent and warrant that liens, assignment rights, or other claims that are identified in the claims administration process have been or will be satisfied by the individual claimant. The amount of settlement awards to participating claimants, the claims evaluation process and procedures used in conjunction with award distributions, and the negotiations leading to the settlement shall be kept confidential by all parties and their counsel.
Based on new facts and circumstances learned through the litigation and settlement process, and taking into account the settlement agreements described above, the Company expects to incur an incremental pre-tax charge, in the third quarter of 2014, increasing the Company’s product liability accrual for all known, pending and estimated future claims primarily related to vaginal mesh products to approximately $1.6 billion. AMS expects to fund the payments under all settlements in 2014, 2015, 2016 and 2017. To date, the company has paid approximately $200 million into qualified settlement funds pursuant to the terms of previously announced agreements. As the funds are disbursed out of the qualified settlement accounts from time to time, the product liability accrual will be reduced accordingly. AMS and the Company intend to contest vigorously all currently remaining pending cases and any future cases that may be brought, if any, and to continue to explore other options as appropriate in the best interests of the Company and AMS. However, it is not possible at this time to determine with certainty the ultimate outcome of these matters or the effect of potential future claims. We will continue to monitor each related legal claim and adjust the accrual for new information and further developments. It is possible that the outcomes of such cases could result in additional losses that could have a material adverse effect on our business, financial condition, results of operations and cash flows.
A copy of the press release announcing the various settlement agreements is furnished as Exhibit 99.1 hereto and is incorporated herein by reference. The information disclosed in Exhibit 99.1 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, nor shall it be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as expressly set forth in such filing.
Item 9.01. | Financial Statements and Exhibits. |
(a) | Financial Statements of Business Acquired. |
Not applicable.
(b) | Pro Forma Financial Information. |
Not applicable.
(c) | Shell Company Transactions. |
Not applicable.
(d) | Exhibits. |
Exhibit Number | Description |
The following document is furnished as an Exhibit pursuant to Item 8.01 hereof. | |
99.1 | Press Release of Registrant, dated September 30, 2014 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
ENDO INTERNATIONAL PLC | |
(Registrant) | |
By: | /s/ CAROLINE B. MANOGUE |
Name: | Caroline B. Manogue |
Title: | Executive Vice President, Chief Legal Officer |
Dated: September 30, 2014
INDEX TO EXHIBITS
Exhibit Number | Description |
The following document is furnished as an Exhibit pursuant to Item 8.01 hereof. | |
99.1 | Press Release of Registrant, dated September 30, 2014 |
Exhibit 99.1
Investors/Media: | Media: | |||
Blaine Davis | Heather Zoumas-Lubeski | |||
+353-1-691-7579 | (484) 216-6829 | |||
Investors: | ||||
Jonathan Neely | ||||
(484) 216-6645 | ||||
Endo Reaches Master Settlement Agreements to Resolve Substantially All Remaining AMS Mesh Litigation Claims
DUBLIN, September 30, 2014 -- Endo International plc (NASDAQ: ENDP) (TSX: ENL) today announced that it has reached master settlement agreements with several of the remaining leading plaintiffs' law firms to resolve claims relating to vaginal mesh products sold by Endo's AMS subsidiary. The agreements, were entered into solely by way of compromise and settlement and are not in any way an admission of liability or fault. The settlements are expected to resolve substantially all of the AMS U.S. vaginal mesh-related claims.
“We are very pleased to resolve substantially all of the remaining U.S. vaginal mesh litigation claims facing our AMS business,” said Rajiv De Silva, president and chief executive officer of Endo. “These settlements will allow us to continue to invest in the growth of our business segments and pursue accretive M&A opportunities. We believe that these settlements will also allow the AMS business to continue its return to growth and enhance focus on the operations and profitability of this leading medical device franchise.”
Endo previously established a pre-tax product liability reserve of approximately $1.2 billion. As a result of these additional agreements described above, the Company expects to increase its pre-tax product liability accrual for all known, pending and estimated future claims primarily related to vaginal mesh products to approximately $1.6 billion in total. AMS expects to fund the payments under all settlements in 2014, 2015, 2016 and 2017. To date, the company has paid approximately $200 million into qualified settlement funds pursuant to the terms of previously announced agreements. As the funds are disbursed out of the qualified settlement accounts from time to time, the product liability accrual will be reduced accordingly.
Endo's top priority is the safety and efficacy of its subsidiaries’ products and supporting the patients and physicians who use them. The Company continues to support the FDA's recommendations that physicians be well trained and patients fully understand the risks associated with the use of mesh products. Endo and AMS remain committed to the safety and efficacy of AMS's transvaginal mesh products, and AMS will continue developing its Women's Health business and devices product suite so that women have appropriate access to innovative, safe and effective therapies. AMS's commitment to these treatment solutions is demonstrated by its ongoing and significant investments in developing clinical evidence to support the restoration of quality of life AMS's mesh solutions provide.
AMS will also continue to invest in educational activities as part of an overall effort to continue to encourage patients and physicians to discuss the risks and benefits of AMS's surgical mesh.
About Endo International plc
Endo International plc is a global specialty healthcare company focused on improving patients' lives while creating shareholder value. Endo develops, manufactures, markets, and distributes quality branded pharmaceutical, generic and device products through its operating companies. Endo has global headquarters in Dublin, Ireland, and US headquarters in Malvern, PA. Learn more at www.endo.com.
About American Medical Systems
American Medical Systems (AMS), headquartered in Minnetonka, MN, is a diversified supplier of medical device technology to treat incontinence, sexual dysfunction, benign prostatic hyperplasia (BPH), and other pelvic disorders. AMS is focused on improving access and outcomes with the goal of restoring patient quality of life. AMS is an operating company of Endo International plc (NASDAQ: ENDP) (TSX: ENL), a global specialty healthcare company focused on improving patients' lives while creating shareholder value. Learn more at www.endo.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Canadian securities legislation. Statements including words such as "believes," "expects," "anticipates," "intends," "estimates," "plan," "will," "may," "look forward," "intend," "guidance," "future" or similar expressions are forward-looking statements. Because these statements reflect Endo's current views, expectations and beliefs concerning future events, these forward-looking statements involve risks and uncertainties. Although Endo believes that these forward- looking statements and information are based upon reasonable assumptions and expectations, readers should not place undue reliance on them, or any other forward- looking statements or information in this news release. Investors should note that many factors, as more fully described in the documents filed by Endo with securities regulators in the United States and Canada including under the caption "Risk Factors" in Endo's Form 10-K, Form 10-Q and Form 8-K filings with the Securities and Exchange Commission and with securities regulators in Canada on System for Electronic Document Analysis and Retrieval ("SEDAR") and as otherwise enumerated herein or therein, could affect Endo's future financial results and could cause Endo's actual results to differ materially from those expressed in forward-looking statements contained in Endo's Annual Report on Form 10-K. The forward-looking statements in this press release are qualified by these risk factors. These are factors that, individually or in the aggregate, could cause Endo's actual results to differ materially from expected and historical results. Endo assumes no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as may be required under applicable securities law.