In­sys seeks bank­ruptcy pro­tec­tion

Opi­oid law­suits, probes mire com­pany in trou­ble

The Arizona Republic - - Front Page - Russ Wiles

Chan­dler-based In­sys Ther­a­peu­tics, once one of Ari­zona’s hottest stocks, filed for bank­ruptcy pro­tec­tion Mon­day in re­sponse to mount­ing li­a­bil­i­ties over opi­oid-re­lated law­suits and in­ves­ti­ga­tions.

The spe­cialty-phar­ma­ceu­ti­cal com­pany, which makes med­i­ca­tions for acute can­cer-re­lated pain relief, filed for a Chap­ter 11 re­or­ga­ni­za­tion in Delaware.

The com­pany’s stock lost more than half its value Mon­day, clos­ing at 62 cents a share, down 69 cents a share for the day, on the bank­ruptcy-fil­ing news.

The stock had peaked above $46 a share in 2015, as In­sys re­ported rapid rev­enue growth and profit im­prove­ment before the opi­oid cri­sis made head­lines with mount­ing deaths na­tion­ally.

Or­derly sale of as­sets

In a state­ment tied to the bank­ruptcy fil­ing, In­sys vowed to con­tinue op­er­at­ing its busi­ness us­ing cash on hand and cash flow. The com­pany said it would pay em­ploy­ees with­out in­ter­rup­tion and ven­dors and sup­pli­ers as nor­mal. The com­pany counted 225 em­ploy­ees na­tion­ally at the end of 2018, down from more than 500 in 2016.

“In­sys has com­pelling as­sets and a highly tal­ented team,” said An­drew Long, the com­pany’s CEO, in a pre­pared state­ment that didn’t cite any plans to down­size the em­ployee base.

His state­ment in­di­cated that a court-su­per­vised sale of as­sets would be “the best course of ac­tion to

max­i­mize the value of our as­sets and ad­dress our legacy le­gal chal­lenges in a fair and transparen­t man­ner.”

The process will also al­low In­sys to ne­go­ti­ate “an equitable res­o­lu­tion with our cred­i­tors and rep­re­sents the best opportunit­y for our peo­ple and our busi­ness,” Long added.

Change in course for In­sys

The com­pany has been try­ing to wean itself from a re­liance on pow­er­ful but dan­ger­ous opi­oid med­i­ca­tions by di­ver­si­fy­ing its prod­uct line into ar­eas such as cannabi­noid med­i­ca­tions to treat epilepsy seizures and in­fan­tile spasms.

In­sys said it in­tends to con­duct var­i­ous as­set sales within 90 days, un­der bank­ruptcy pro­tec­tion, to raise cash to meet cred­i­tor claims as ef­fi­ciently and quickly as pos­si­ble.

Founder and for­mer CEO John Kapoor was con­victed last month of rack­et­ing charges re­lated to com­pany ef­forts to boost sales of its main opi­oid prod­uct by of­fer­ing bribes to doc­tors and other med­i­cal pro­fes­sion­als. He and sev­eral other se­nior In­sys ex­ec­u­tives await sen­tenc­ing.

Kapoor, who has a doc­tor­ate de­gree in medic­i­nal chem­istry, had been listed among the seven richest Ari­zo­nans by Forbes as re­cently as 2016 with an es­ti­mated net worth at the time of $2.1 bil­lion.

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