(Bloomberg) -- Endo International Plc’s $35 million settlement of a multi-billion-dollar Tennessee opioid lawsuit spares the drugmaker a potentially disastrous blow but leaves other threats to the company in place and shows how the larger legal fight is evolving.

The agreement in principle announced Thursday -- one day after the mammoth deal that Johnson & Johnson and three drug distributors struck with U.S. state and local governments -- requires more than two dozen local governments to sign off.

Cash-poor Endo “could have headed for Chapter 11” bankruptcy proceedings if the $2.4 billion Tennessee suit had succeeded, said Richard Ausness, a University of Kentucky law professor who has been following the U.S. opioid litigation. “If the counties are willing to let them settle for $35 million, the Endo guys should take that and run,” he said. “It will let them live to fight another day.”

But even if it seals the deal, Endo has many more lawsuits to work through. The pact is for local governments from only three of at least 15 of the state’s judicial districts in which suits have been filed against the company. Meanwhile, Endo is among the defendants in a lawsuit by New York counties seeking more than $2 billion. 

Read More: Endo Creditors Tap Restructuring Advisers Amid Opioid Suits 

To resolve all its liability in a “global settlement” like the one J&J and the distributors announced Wednesday could cost as much as $3 billion based on the Tennessee deal, Bloomberg Intelligence analyst Holly Froum estimates.

Heather Zoumas-Lubeski, an Endo spokeswoman, didn’t return an email and a call seeking comment on the settlement. Gerard Stranch, the lead lawyer for the Tennessee municipalities, said he couldn’t comment on the proposed settlement because it hadn’t yet been approved by all of his clients.

‘Stay Alive’ 

“It’s clearly a positive development, but still only a very small piece of Endo’s total opioid exposure,” said Gabelli & Co. analyst Kevin Kedra, who has a hold rating on Endo stock for now. The shares, which rose as much as 23% Thursday on news of the agreement, are down more than 30% so far this year. 

The opioid epidemic has been blamed for more than 500,000 deaths over two decades. The Tennessee agreement, over the marketing of Endo’s Opana painkiller, and the big J&J pact reflect differences in “national scale” and “negotiating leverage,” said Alexandra Lahav, a law professor at the University of Connecticut.

“What I would predict is they’ll try to prolong this process for as long as they can with relatively small payouts,” Lahav said of Endo, which has cash reserves of about $1.4 billion. Then, she said, the Dublin drugmaker will “either drag it out long enough that everyone gets tired and ready to settle globally, or they’ll just keep going as long as they can, take the occasional hit from one-off settlements and try to stay alive.”

Read More: J&J, Distributors Unveil $26 Billion Opioid Deal With States  

Anticipation of the Tennessee trial in recent weeks had helped spur Endo’s debtholders to hire advisers for a potential restructuring, unsure they’d ever be repaid if the trial went badly for Endo. Following the settlement, Endo’s bonds and loans climbed back from recent lows, likely reflecting investors’ relief as the threat of bankruptcy receded. Its notes due 2027 bounced as high as 103 cents on the dollar Thursday after trading around 96 cents in the preceding weeks. 

The opioid settlement process involves a constant resetting of expectations, said Jared Ellias, a law professor at the University of California at Hastings.

“As claims against opioid manufacturers move through the system, each settlement helps to set the price of the ones that come after it,” Ellias said. The Tennessee agreement shows “victims of opioids making significant progress towards getting some compensation for their damages,” he said. “But whether it is enough will be a question only the victims can answer, and in many cases that answer will be no.”

Read More: States, Cities Eye $26 Billion Deal: Opioid Litigation Explained

©2021 Bloomberg L.P.