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Endo Health Unit Pays $55 Million in Vaginal Mesh Accord

An Endo Health Solutions (ENDP) Inc. unit agreed to pay $54.5 million to settle some lawsuits alleging its vaginal-mesh implants eroded in some women and left them incontinent and in pain.

Officials of Endo’s American Medical Systems Inc. said in a securities filing today the medical-device maker is paying to resolve an unidentified number of suits over the company’s vaginal-mesh devices, which include the Perigee, Apogee and Elevate implants.

The settlement doesn’t affect the majority of about 5,000 vaginal-mesh suits filed against AMS that have been consolidated for pre-trial proceedings before a federal judge in West Virginia. The first trial of a federal AMS case is set for December, according to court filings.

AMS executives “intend to continue to vigorously defend themselves in the remaining mesh product liability cases and in any new cases that may arise,” company officials said in the filing with the U.S. Securities and Exchange Commission.

Moody’s Investors Service in March lowered its outlook on Chadds Ford, Pennsylvania-based Endo, maker of the painkillers Percocet and Lidoderm, after noting the company’s increasing exposure to vaginal-mesh lawsuits.

Mounting Lawsuits

Endo officials said earlier this year suits filed over the implants had risen to about 5,100 from more than 2,900 it tallied last year. AMS’s products are designed to treat the collapse of pelvic organs as well as urinary incontinence. Endo acquired AMS for $2.9 billion in 2011.

Blaine Davis, an Endo spokesman, declined to comment on the settlement beyond the SEC filing. “As a matter of company policy, we do not comment on ongoing litigation,” he said in an e-mailed statement.

Endo is one of four companies facing a total of 29,000 suits by women who claim the vaginal implants injured them. Those cases have been consolidated before U.S. District Judge Joseph Goodwin in Charleston, West Virginia. C.R. Bard Inc. (BCR) is set to face its first trial over the devices before Goodwin starting July 8.

A California jury last year found Murray Hill, New Jersey-based Bard liable for $3.6 million in damages over a woman’s injuries tied to its Avalta Plus vaginal implant. It was the first case over a Bard device to go to trial.

An Atlantic City jury decided in February Johnson & Johnson (JNJ) and its Ethicon unit must pay more than $11 million in damages, including more than $3.3 million in punitive damages, to a woman who blamed the company’s Gynecare Prolift implant for her injuries.

JNJ officials pulled four of its lines of vaginal implants off the worldwide market last year in the face of rising numbers of suits over the devices.

Small Settlement

AMS’s settlement resolves claims filed by a small group of plaintiffs’ lawyers representing women who filed cases both in federal and state courts, said Fred Thompson, a South Carolina-based lawyer and a leader of a group of plaintiffs’ attorneys overseeing the cases consolidated in West Virginia.

Thompson said the majority of the women whose AMS cases were settled in the $54.5 million accord were represented by David Matthews, a Houston-based plaintiffs’ attorney.

Matthews didn’t immediately respond after regular business hours to a call seeking comment on the settlement. Davis, Endo’s spokesman, didn’t respond to an e-mailed request for comment on whether the settlement involved Matthews’ cases.

“There’s no universal settlement,” Thompson said.“We are still pressing ahead with the process of getting the rest of the cases ready for trial.”

A U.S. Food and Drug Administration report in August 2011 found vaginal-mesh products should be classified as posing high risk to patients based on a review of side-effect reports from January 2008 to December 2010. Women’s groups are demanding that the devices be recalled.

Reduced Profits

The FDA last year ordered 31 manufacturers, including Endo, Bard and J&J, to study rates of organ damage and complications linked to the implants. The companies must conduct three years of safety studies, regulators said.

Endo officials this month announced the company would reduce profit and revenue forecasts for the year and said it would cut 15 percent of its global workforce.

The company cut its 2013 revenue forecast to $2.65 billion to $2.8 billion from $2.8 billion to $2.95 billion and cut its projected profit excluding some items to $4.10 to $4.40 a share from $4.40 to $4.70.

FDA officials ruled last month that generic copies of Endo’s Opana ER may remain on the market without abuse-deterrent technology. The competition may reduce sales by as much as $120 million and cut profit by 55 cents a share, Endo executives said.

The consolidated AMS cases are In re American Medical Systems Inc. Pelvic Repair Systems Products Liability Litigation, 12-md-02325, U.S. District Court, Southern District of West Virginia (Charleston).

To contact the reporter on this story: Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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