Insy Therapeutics (NASDAQ: INSY) filed for bankruptcy on Monday and became the first opioid manufacturer to do so as a result of a federal probe investigating the company’s bribery efforts.
The Company was convicted and agreed to a USD 225 Million settlement with the Department of Justice concerning the Company’s method of bribing doctors to prescribe Subsys, a highly addictive fentanyl spray. Fentanyl is an opioid 80-100 times stronger than morphine and was responsible for 47,600 deaths in the U.S. during 2017. CBS News reported that Insys made 18,000 payments to doctors in 2016 totaling more than USD 2 Million. After the bankruptcy filing, Insys shares plummeted to a new low of 14 cents.
The manufacturer stated in a press release on Monday that the Company will sell the majority of its assets through a court-supervised bidding process while continuing to operate its business. Insys will conduct asset sales in accordance with Section 363 of the U.S. Bankruptcy Code and intends to maximize value.
“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,” said Andrew G. Long, Chief Executive Officer of Insys. “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.”