OxyContin maker Purdue taps financial restructuring adviser - sources
NEW YORK/BOSTON: OxyContin maker Purdue Pharma LP has tapped law firm Davis Polk & Wardwell LLP for financial restructuring advice, as its potential liabilities swell with a wave of lawsuits over the opioid addiction epidemic sweeping the United States, people familiar with the matter said on Thursday.
Purdue and other opioid manufacturers, including Endo International Plc and Johnson and Johnson, have been fighting hundreds of lawsuits filed by U.S. states, counties, and cities accusing the drugmakers of pushing addictive painkillers through deceptive marketing.
U.S. President Donald Trump said on Thursday that he would like to bring a federal lawsuit against the companies over the opioid crisis. According to the U.S. Centers for Disease Control and Prevention, opioids were involved in more than 49,000 deaths in the United States last year.
The sources that disclosed the appointment of Davis Polk asked not to be identified because the matter is confidential.
"Purdue is preparing for a bright future that includes diversification into non-opioid products," Purdue told Reuters in a statement.
The privately held company said that it retains firms with a variety of expertise but declines to discuss publicly who those firms are and the reasons for which they are retained
Davis Polk did not immediately respond to a request for comment.
Purdue has been participating in settlement talks with lawyers for the plaintiffs, who have often compared the cases to the litigation by states against the tobacco industry that led to a $246 billion settlement in 1998.
The lawsuits have accused Purdue of deceiving doctors and patients and of misrepresenting the risks of addiction and death associated with the prolonged use of its prescription opioids. The company has denied the allegations.
At least 27 states and Puerto Rico have sued Purdue. New York became the latest state to sue Purdue, in a lawsuit filed on Tuesday alleging that the company sought to boost profits at the cost of lives.
The drugmaker, which is owned by the Sackler family, announced in June that it had laid off 350 employees including the remainder of its sales force, which had been reduced in February when Purdue said it would stop sending representatives to doctors' offices to discuss the pain medications.
The company currently has 550 employees and has focused its efforts on developing medications for sleep disorders and cancer.
In July, Steve Miller, a restructuring veteran who recently retired as chief executive of automotive supplier International Automotive Components Group and is the author of "The Turnaround Kid," joined Purdue's board as the chairman.
(Reporting by Jessica DiNapoli in New York and Nate Raymond in Boston; Editing by Leslie Adler)