Drugmaker Insys Therapeutics Inc. on Monday became the first opioid manufacturer to file for bankruptcy after settling a multimillion-dollar probe into the company’s role in fueling the nation’s opioid epidemic.
Insys last week agreed to a $225 million settlement over an criminal and civil investigation by the Department of Justice into its practice of bribing doctors to prescribecalled Subsys.
Monday’s bankruptcy filing sent Insys shares tumbling 66% to 44 cents in premarket trading.
Insys will continue its business operations while pursuing the sale of substantially all of the company’s assets through a court-supervised bidding process, the company explained in a press release Monday. How much of its $225 million settlement with the U.S. government is ever collected depends on how much money is raised through the bankruptcy court’s sales of its assets.
“We determined that a court-supervised sale process is the best course of action to maximize the value of our assets and address our legacy legal challenges in a fair and transparent manner,” Insys CEO Andrew G. Long said in the statement, citing the company’s “compelling assets and a highly talented team. We believe this process will provide us with a forum to negotiate an equitable resolution with our creditors and represents the best opportunity for our people and our business.”
A jury in Boston last month found Insys founder John Kapoor and four other former executives guilty of bribing doctors to prescribe Subsys — an FDA-approved drug for pain treatment in cancer patients — and other illegal sales practices.
Among the pieces of evidence presented during the 10-week trial: a five-minute video promoting the fentanyl spray Subsys, featuring an Insys company salesman rapping about prescribing higher drug doses using a process known as “titration.”
Prosecutors say the video was just one of the dubious tactics Insys used to boost profits which also included bribing doctors by paying them for sham speaking engagements. In 2017, CBS News learned Insys made 18,000 payments to doctors in 2016 totaling more than $2 million. Insys responded at the time that “the actions of a select few former employees…are not indicative of the hard work conducted by our talented team today.”
The opioid fentanyl is 100 times stronger than morphine. Opioids were involved in a record 47,600 overdose deaths in the U.S. in 2017, according to the U.S. Centers for Disease Control and Prevention.