Opioid drug maker files for bankruptcy protection

Opioid drug maker files for bankruptcy protection

Opioid drug maker files for bankruptcy protection

In a regulatory filing Monday, Insys Therapeutics said it has sought Chapter 11 protection to facilitate a sale of most of its assets and address its legacy obligations such as a recent multimillion-dollar settlement with the federal government.

The bankruptcy filing came after a federal jury in Boston in May found Insys founder John Kapoor and four other former executives guilty of engaging in a racketeering conspiracy centered on its fentanyl spray, Subsys. However, it has since become a favorite go-to drug for opioid addicts given that fentanyl is roughly 100 times stronger than morphine. It agreed to pay a $20 million fine to settle.

In 2012, the Food and Drug Administration (FDA) approved Subsys to treat cancer patients.

The company said throughout the court-supervised Chapter 11 bankruptcy process, it meant to utilise existing cash on hand and operating cash flows to support its continued operations, including payment of all employee wages and benefits without interruption and continuing programmes offered to customers.

As part of INSYS' settlement, revealed last Wednesday (June 5), its subsidiary will plead guilty to five charges of mail fraud.

According to court documents, Kapoor along with other Insys executives had conducted sham events to promote their products. Kapoor was convicted for bribing doctors through monetary and sexual courtesies to prescribe the highly addictive drug to patients by the thousands, even those who had no sign of cancer. They used this information to reduce or eliminate bribes paid to practitioners who failed to meet satisfactory prescribing requirements, which they determined to be the net revenue equal to at least twice the amount of bribes paid to the practitioner.

The investigation took a toll on Insys and sales of Subsys declined. Subsys sales shot up from $8.6 million in 2012 to $329 million in 2015.

'For years, Insys engaged in prolonged, illegal conduct that prioritized its profits over the health of the thousands of patients who relied on it, ' U.S. Attorney Andrew Lelling in MA said. Notorious OxyContin maker Purdue Pharma also reportedly explored the option. The company has donated $500,000 toward defeating an Arizona ballot initiative that would make recreational use of marijuana legal in the state. The company had stated that it is considering filing for bankruptcy due to the litigations.

AMERICAN pharmaceutical major Insys Therapeutics has filed for bankruptcy and will sell all its assets, the company has announced.

Monday's bankruptcy filing sent Insys shares tumbling 66% to 44 cents in premarket trading.

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