subject: Could Darvocet Lawsuits Push Xanodyne Pharmaceuticals to Insolvency? [print this page] Could Darvocet Lawsuits Push Xanodyne Pharmaceuticals to Insolvency?
As Darvon and Darvocet lawsuits continue to be filed against Xanodyne Pharmaceuticals, Inc., there are signs that the cost of defending legal charges may push the company into economic ruin.
Xanodyne, founded in 2001 and headquartered in Newport, Kentucky, acquired Darvon and Darvocet from AAIPharma Inc. of Wilmington, N.C. in 2005 for $209 million after AAI declared bankruptcy. AAI itself had bought Darvon and Darvocet from the original patent holder, Eli Lilly and Company, in 2002 for just over $210 million. It should be noted that Xanodyne sells and markets prescription drugs such as Darvon and Darvocet, but is not a manufacturer, which, according to Brad Mitchell, a Cincinnati-based consultant to pharmaceutical companies, helps the firm keep costs (such as expensive equipment and highly skilled workers) down.
A privately held company, Xanodyne hinted at making a public offering in 2007, a year in which it had revenue of $74 million$26 million of which was from Darvon and Darvocet sales. But two months before the FDA's recall of propoxyphene (the main active ingredient in Darvon and Darvocet), Xanodyne laid off 60 percent of its 200+ employees. Presumably, Xanodyne expected propoxyphene to be recalled. After all, in 2009 the FDA ordered it to conduct clinical trials to measure the drug's cardiac safety. The results showed that even when given to healthy patients at recommended doses, propoxyphene can cause dangerous heart rhythm abnormalities.
While Xanodyne, which also distributes prenatal vitamins and pain medications Zipsor and Oramorph, can likely find other pharmaceutical products to compensate for the loss of Darvon and Darvocet to its revenue, the biggest hit to the company could come in the form of punitive and compensatory damages stemming from the lawsuits against it.
According to Mitchell, "When a company is faced with a significant issue like this, they've really got to evaluate their strategy. There are certainly instances where companies have had to fold because the cost of liability and the cost of litigation and settling claims were in excess of their asset base."
The lawsuits against Xanodyne, filed by users who have suffered cardiac injuries and the families of those who suffered a fatal propoxyphene overdose, allege that the company failed to provide warning of Darvon's and Darvocet's life-threatening side effects. Later this month, the Judicial Panel on Multidistrict Litigation is set to meet in San Diego, where it will hear arguments about whether all federal propoxyphene cases should be consolidated under a single judge for pretrial matters.
When a decision is made by the Panel, the Rottenstein Law Group will be sure to provide information on this important news immediately. Until then, if you have any questions about a Darvon Darvocet Lawsuit, or are considering taking legal action against Xanodyne, Eli Lilly, or another company, don't hesitate to contact RLG. The lawyers of RLG have more than 25 years of experience in product liability law, making us the ideal firm to handle your claim.
