Insys Therapeutics, a specialty pharmaceutical development and distribution company, said Monday (10) it had filed voluntary cases in the US Bankruptcy Court in the District of DE to facilitate the sale of substantially all of the company's assets and address the company's legacy legal liabilities.
The chief executive officer at INSYS Therapeutics Andrew Long said: "After conducting a thorough review of available strategic alternatives, we determined that a court-supervised sale process is the best course of action to maximise the value of our assets and address our legacy legal challenges in a fair and transparent manner".
Shares from opioid maker Insys Therapeutics Inc. will be delisted from the Nasdaq on June 19, the company said in a government filing on Tuesday. On Monday the company filed for Chapter 11 bankruptcy, saying it needs to sell its assets to pay back creditors.
The original suit included other opioid manufacturers, including Purdue Pharma L.P., Endo Pharmaceuticals, Inc., Janssen Pharmaceuticals, Inc., Cephalon, Inc., Allergan plc, Mallinckrodt LLC, and related companies, as well as the major opioid distributors, AmerisourceBergen Drug Corporation, Cardinal Health, Inc., McKesson Corporation, and a related company.
The company stated that it would utilise this cash to support continued operations, including the payment of vendors and suppliers in full, after filing for bankruptcy.
Prosecutors said Insys used kickbacks and other illegal marketing practices to boost sales of Subsys, an under-the-tongue spray meant to treat pain in adult cancer patients and which contains fentanyl, an opioid 100 times stronger than morphine. Last month, a federal jury in Boston found Insys executives guilty of starting and participating in a wide-spread racketeering conspiracy. However, the company will remain liable for the $28 million forfeiture amount outlined in the criminal settlement regardless of Chapter 11 protection, a spokeswoman for Boston's U.S. Attorney's Office told NPR. Bankruptcy documents show that, as of March 31, Insys had just $175.1 million in assets and $262.5 million already in debt.
Pharmaceutical companies have increasingly been in the crosshairs of federal, state, and local governments trying to deal with the effects of opioid addiction.
The scam involved paying doctors through a fake "speakers program" between 2012 to June 2015. The company had stated that it is considering filing for bankruptcy due to the litigations. "Today, the company is being held responsible for that and for its role in fueling the opioid epidemic".
The Centers for Disease Control and Prevention reported there were 47,000 deaths from opioids in 2017, and prescription medications accounted for more than 33% of those.