Sterigenics’ parent company Sotera Health announced that it has agreed to settle more than 870 ethylene oxide lawsuits in Illinois.
The agreements, announced yesterday evening, have Sterigenics paying $408 million to settle the claims filed in the Circuit Court of Cook County and U.S. District Court in northern Illinois.
Sotera Health saw its stock more than double in value today on the settlement news, with SHC shares up 104% to $17.60$ apiece on the Nasdaq.
The settlement comes about four months after a Cook County jury awarded $363 million in a lawsuit that blamed Sterigenics EtO emissions from its now-shuttered Willowbrook facility for a woman’s breast cancer and her son’s non-Hodgkin’s lymphoma. The verdict in September 2022 shook the medtech space, which relies on EtO as a major sterilization method for manufactured medical devices. Analysts even wondered whether ethylene oxide liabilities would impact financial results for Sterigenics competitors such as Steris.
The Sterigenics settlement denies liabality
Sterigenics won a second jury verdict in Cook County in November. However, Sterigenics and Sotera Health said last night that it was time to comprehensively resolve the Illinois claims. The company wants to focus its full attention on business operations.
The statement went on:
“Sterigenics maintains that its Willowbrook operations did not pose a safety risk to the community in which it operated and believes the evidence and science ultimately would have compelled the rejection of the plaintiffs’ claims, as occurred in the Teresa Fornek trial. However, years of biased media coverage in the greater Chicago area, the significant costs of posting a large bond in support of the appeal of the [Susan] Kamuda verdict, and the time and expense that would have been required to continue to contest hundreds of additional lawsuits through a multi-year process in the Illinois court system led us to conclude that resolving the pending Willowbrook EO cases would be in the best interest of the company and its stakeholders.”
Sterigenics and Sotera Health officials expect the administration and completion of the settlement agreements will take up to 90 to 120 days. An appointed claims administrator will pay out the settlements from a company-funded escrow account.
Ethylene oxide remains a major issue in medtech
In addition to lawsuits, the medical device industry is facing additional scrutiny from regulators over EtO sterilization.
The EPA over the past summer identified 23 U.S. facilities where use of ethylene oxide presents a risk to communities. Unsafe EtO emission levels create an elevated cancer risk, particularly blood cancers and breast cancer, according to the EPA.
The FDA is also concerned about unsafe EtO emissions. The agency is working with the medical device industry to reduce EtO usage and develop new sterilization methods.