Purdue Pharma is set to sell its consumer health business, Avrio Health, for $397 million to a subsidiary of Arcadia Consumer Healthcare after it was granted permission in US bankruptcy court.
The approval allows Purdue to begin liquidating its assets as it awaits a final ruling on a $10 billion settlement to address the US opioid epidemic.
Purdue Pharma filed for bankruptcy in September 2019 due to the thousands of lawsuits it faced alleging that its opioid painkiller OxyContin played a significant role in fueling the epidemic with aggressive marketing and misrepresentation of the opioid’s addictive properties. The company faced mounting legal costs and potential liabilities from these lawsuits, leading to its decision to file for bankruptcy as a means of resolving and managing the extensive litigation it faced.
Purdue's creditors' committee has urged the company to use the sale proceeds to compensate victims of the crisis and fund addiction treatment programs. However, Purdue's attorney, Eli Vonnegut, explained at the hearing that the company needs to build consensus among various stakeholders in its bankruptcy before taking any steps.
Appeals challenging Purdue's attempt to shield its owners, the Sackler family, from liability have delayed the settlement. The 2nd US Circuit Court of Appeals is yet to rule on the appeal.
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