Site icon pharmaceutical daily

Purdue Pharma L.P. Files Broadly Supported Plan of Reorganization

Plan will create National Opioid Abatement Trust

Plan will make more than $10 billion in value available for opioid abatement programs across the country

100% of Purdue’s assets will be transferred to a new company dedicated at its core to addressing the opioid crisis

Plan has broad creditor support

Sacklers to pay $4.275 billion into bankruptcy estate

STAMFORD, Conn.–(BUSINESS WIRE)–Purdue Pharma L.P. today filed a Chapter 11 plan of reorganization (the Plan) and a related disclosure statement in the United States Bankruptcy Court for the Southern District of New York. True to the vision articulated at the outset of the Chapter 11 proceedings, the Plan charts a path for more than $10 billion of value, including 100% of Purdue’s assets, to be delivered to claimants and communities across the country affected by the opioid crisis.

“Purdue has delivered a historic plan that can have a profoundly positive impact on public health by directing critically-needed resources to communities and individuals nationwide who have been affected by the opioid crisis,” said Steve Miller, chairman of Purdue’s Board of Directors. “The company has worked closely with a broad and diverse group of stakeholders to guarantee that billions of dollars will be used exclusively for abatement purposes and not diverted elsewhere.”

The company believes there is broad and strong support for the Plan, including many state Attorneys General, the Ad Hoc Committee of Governmental and Other Contingent Litigation Claimants, the Multi-State Governmental Entities Group, and nearly every group of private creditors.*

The Plan is unprecedented in scope and nature. First, it will transfer billions of dollars of value into trusts for the benefit of the American people. Second, it will dissolve Purdue and transfer its operating assets to a newly formed company with the public-minded mission of addressing the opioid crisis. State and local governments will neither own, nor operate the new company.

Creation of Trusts to Abate the Opioid Crisis Across America

The single largest recipient of funds under the Plan would be the National Opioid Abatement Trust (NOAT), a newly-formed entity created to satisfy the claims of state and local governments. NOAT would receive billions of dollars, and those funds would be exclusively dedicated to programs designed to abate the opioid crisis. NOAT and an abatement trust established to satisfy claims asserted by Indian Tribes and Tribal Organizations (the “Tribe Trust”) would together indirectly own 100% of the new company.

In addition to NOAT and the Tribe Trust, the Plan contemplates the creation of several additional trusts, including:

Each of these trusts established under the Plan will be required to consider the need to ensure that underserved urban and rural areas, as well as minority communities, receive equitable access to the funds.

Funding for the various trusts comes primarily from three sources:

  1. An initial cash distribution from the company of more than $500 million immediately upon emergence from bankruptcy.
  2. Approximately $1 billion expected to be generated by the assets and the operations of the new post-bankruptcy pharmaceutical company through the end of 2024, for a projected total of approximately $1.5 billion, plus substantial additional recoveries expected from insurance claims.
  3. $4.275 billion in cash payments by the Sackler families.

In addition to this cash funding, the company estimates that approximately $4 billion in value could also be provided through the new company’s Public Health Initiatives (described in more detail below).

Under the Plan, the Sackler families have agreed to pay $4.275 billion in addition to the $225 million previously paid to the United States to resolve civil claims against Purdue’s former shareholders, for a total settlement of $4.5 billion. This amount represents a $1.5 billion increase from the $3 billion agreement in principle reached in September 2019. Under the terms of the settlement, the money would be paid in cash on an agreed to schedule over nine years (or ten years if certain payments are made ahead of schedule). Additionally, the Sackler families will be required to sell their world-wide pharmaceutical businesses within seven years of the Effective Date, and not engage in the manufacturing or sale of opioid medications going forward.

Creation of A New Company Dedicated to Addressing the Opioid Crisis

After confirmation of the Plan, Purdue’s assets would be transferred to a newly formed company.

“Our teams of scientists are committed to developing and delivering medications and solutions to meaningfully address the opioid crisis,” said Dr. Julie Ducharme, vice president, chief scientific officer, and Public Health Initiatives co-lead. “We have the capability and the passion to make a substantial difference right away, and for years to come.”

The full terms of the Plan and the disclosure statement can be viewed here.

The Plan filed today may be amended or supplemented from time to time and is subject to confirmation by the Bankruptcy Court. A hearing to approve the disclosure statement is scheduled for April 21, 2021. Following the Bankruptcy Court’s approval of the disclosure statement, Purdue will distribute the Plan and disclosure statement to voting creditors for their consideration.

“With drug overdoses still at record levels, it is past time to put Purdue’s assets to work addressing the crisis,” said Steve Miller. “We are confident this plan achieves that critical goal.”

 
 

Plan of Reorganization Highlights

 

 

 1.

The vast majority of proceeds will be used to abate the opioid crisis; these funds cannot be diverted to other purposes.

 2.

The Plan will deliver more than $10 billion in value, including providing, at cost, millions of doses of potentially lifesaving opioid addiction treatment and overdose reversal medicines.

 3.

Purdue will be dissolved. All its assets will be transferred to a new company after emergence from Chapter 11 that will be held to the highest standards of conduct, including a prohibition restricting the promotion of opioid products to healthcare professionals.

 4.

The new company will ultimately be owned by a new National Opioid Abatement Trust established for the benefit of the American people. State and local governments will neither own, nor operate the new company.

 5.

The Sacklers will have no involvement in the new company, will end their involvement in pharmaceutical companies worldwide, and have increased their contribution to the global settlement to a total of $4.5 billion.

 

* As specified in the plan, certain provisions remain open for final resolution and the support of the listed parties remains subject to the satisfactory resolution of those issues.

**This information discusses investigational uses of agents in development and are not intended to convey conclusions about efficacy or safety. There is no guarantee that the medications listed in this release will successfully complete development or gain FDA approval.

About Purdue Pharma L.P.

Purdue Pharma and its subsidiaries are physician-founded and physician-led companies that develop, manufacture and market medications and consumer health products to meet the evolving needs of healthcare professionals, patients, consumers and caregivers. Purdue Pharma is also committed to driving innovations in patient care while continuing our efforts to address the opioid crisis.

Purdue’s subsidiaries include: Adlon Therapeutics L.P., focused on treatment options for Attention-Deficit/Hyperactivity Disorder (ADHD) and related disorders; Avrio Health L.P., a consumer wellness company that provides over-the-counter products to fight infection, promote digestive wellness and provide health supplements; Imbrium Therapeutics L.P., established to develop and commercialize non-opioid pain medications and therapies for select oncology and CNS disorders; Rhodes Pharmaceuticals L.P., which develops and supplies primarily solid oral-dose and transdermal medications; and Greenfield Bioventures L.P., an investment vehicle focused on compounds in the early stages of clinical development.

For more information, visit www.purduepharma.com.

Contacts

Media:
Michele Sharp

(203) 588-7584

Exit mobile version