Arizona Opioid Company Insys Therapeutics To Close After Convictions, Bankruptcy
A Chandler-based company at the heart of opioid-related lawsuits across the country will soon close its doors.
In an Aug. 9, 2019, state filing, Insys Therapeutics said it will be winding down and closing its facilities over the next few months. By Oct. 8, nearly 100 employees will lose their jobs with the specialty-pharmaceutical company.
In a statement to KJZZ, Insys said, “As a result of INSYS’ court-supervised process to sell substantially all of the Company’s assets, we expect a significant reduction in our work force in Chandler on October 8, 2019. The remaining employees in Chandler will assist in the wind down of the Company. All employees in or reporting to the Chandler location will continue to be paid and receive benefits as normal for the remainder of their employment with the Company. We thank our employees for their dedication and efforts on behalf of INSYS.”
On May 2, 2019, a federal jury found company founder and former CEO John Kapoor and three former Insys managers guilty of racketeering. They were accused of conspiring to bribe doctors and others to boost sales of its highly addictive fentanyl spray by prescribing it for routine pain. The drug was approved for extreme pain, not routine pain. Prosecutors also said Insys employees lied to insurance companies.
On June 5, 2019, Insys entered into a deferred prosecution agreement with the U.S. Department of Justice which centered on illegal conduct involving the promotion of Subsys, a powerful opioid painkiller. The deal called for the operating subsidiary to plead guilty to five counts of mail fraud, the company to pay a $2 million fine and $28 million in forfeiture. As part of the civil resolution, Insys will pay $198 million to settle allegations it violated the False Claims Act.
On June 10, 2019, Insys filed for Chapter 11 bankruptcy reorganization. At the time, Insys expressed plans to continue operations and work to diversify its product line to focus on cannabinoid medications.
In a federal filing on Aug. 29, 2019, Insys said it sold its naloxone nasal spray, related equipment and other assets to Hikma Pharmaceuticals for $17 million in cash. On August 30, Insys stock was trading at $0.16 per share.