TUCSON, Ariz. (KOLD News 13) - Chandler-based drug manufacturer, Insys Therapeutics, has filed for Chapter 11 bankruptcy.
The filing comes days after the company admitted to bribing doctors to prescribe a powerful fentanyl spray. Last Friday, Insys agreed to pay $225 million to settle a Justice Department probe.
Insys is the first drug manufacturer to turn to bankruptcy due to expenses and brought on claims of responsibility in the opioid epidemic.
The company’s stock plummeted following the announcement. When the markets closed Friday, the stock was trading at $1.31 per share. By noon Monday, it was down to .63 per share.
Chapter 11 bankruptcy would allow Insys to reorganize and decide which assets to sell off and possibly pay its creditors. This is different from Chapter 7 bankruptcy, where a trustee usually decides what assets to sell off to pay some of the company’s debts.
Last month, Insys CEO, John Kapoor, and four of his former employees were found guilty of federal racketeering charges. Each of face up to 20 years in prison when they are sentenced later this year. During the trial, a video made for the company was played to the jury.
The video, titled “Great by Choice,” was shown during a national sales meeting in 2015 to encourage Insys employees to talk doctors into prescribing higher doses, according to prosecutors.
In it, suit-clad sales reps rap to the tune of a song by artist, A$AP Rocky, about titration, the process of increasing the strength of a patient’s prescription until it reaches the adequate level.
KOLD News 13 has been keeping up by reporting on Insys over the years.
Other opioid manufactures are facing similar lawsuits. OxyContin maker, Purdue Pharma, considered filing for bankruptcy as well.