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April 30, 2014 /PRNewswire/ -- Endo International plc (NASDAQ: ENDP) (TSX: ENL) today announced that it has reached agreements in principle with several leading plaintiffs' law firms, including Motley Rice LLC, Blasingame, Burch, Garrard & Ashley, P.C., Levin Simes LLP, and Clark, Love & Hutson, G.P., to resolve approximately 20,000 claims relating to vaginal mesh products sold by Endo's AMS subsidiary. The agreements, which are subject to final documentation, were entered into solely by way of compromise and settlement and are not in any way an admission of liability or fault. The settlements, once final, will resolve a substantial majority of the AMS vaginal mesh-related claims.
Under the terms of the agreements, Endo estimates that it will pay an aggregate pre-tax amount of approximately
$830 million in connection with the resolution of these claims. The aggregate amount is expected to be payable over time. The settlements are subject to a number of requirements that the individual plaintiffs' law firms must fulfill, including verification of the implant of an AMS vaginal mesh product and confirmation of pertinent medical records.
Endo previously established a product liability reserve of approximately
$520 million for all then known, pending and estimated future claims primarily related to vaginal mesh products, which the Company believed represented the minimum anticipated loss AMS would sustain with respect to this litigation, including potential liabilities and/or possible settlements. Based on the settlement agreements described above, the Company will incur an incremental pre-tax, non-cash charge of approximately
$625 million in the first quarter of 2014, increasing the product liability accrual to approximately
$1.1 billion in total. Of this
$1.1 billion, approximately
$830 million is related to the resolution of the approximately 20,000 cases as noted above. The Company anticipates that the total accrual represents payments through 2016. The Company will announce its first quarter 2014 financial results tomorrow,
Endo's top priority is the safety and efficacy of its 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 will continue developing AMS' 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.