Opioid maker files for Chapter 11
Insys pleaded guilty to fraud charges last week.
Pharmaceutical company Insys Therapeutics filed for Chapter 11 bankruptcy protection Monday less than a week after pleading guilty to federal fraud charges and agreeing to pay $225 million to resolve allegations tied to its addictive opioid painkiller.
Insys said it plans to use the bankruptcy process to arrange a sale of its assets that would allow it to continue operating.
“After conducting a thorough review of available strategic alternatives, 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 Long said in a statement. The bankruptcy filing comes after Insys on Wednesday pleaded guilty to five counts of mail fraud after authorities alleged the company paid kickbacks and pursued unlawful marketing of its opioid drug Subsys.
The drug, a sublingual fentanyl spray that the Justice Department described as “a powerful, but highly addictive, opioid painkiller,” is used to treat pain in certain adult cancer treatments.
The bankruptcy also comes after the company’s founder and former chairman, John Kapoor, and four other top executives were convicted of orchestrating a scheme involving bribes and kickbacks to physicians who prescribed large amounts of the drug to patients who didn’t need it.
The case was described as the first conviction of a drug company CEO on charges related to opioids.
In its bankruptcy petition, Insys listed $175.1 million in assets and $262.5 million in debt. The company listed Kapoor as still owning 63.2% of the company.