Insys Therapeutics (INSY) Stock Flies On Bankruptcy News

Insys Therapeutics INSY Stock News

Insys Therapeutics Inc (NASDAQ: INSY) hasn’t had the best of times in the market as of late. The company was the center of an investigation by the Department of Justice, leading to charges being filed against the company. Recently, Insys settled with the DoJ agreeing to pay $225 million and earning a department of the company a guilty verdict.

This has led to quite a few changes. A board member and chairman of the board recently announced that they would be resigning from their positions. The company also announced that it would file bankruptcy.

So, what is it that has INSY stock up by more than 200% this morning? The company received interim approvals for its First Day motions made in the Chapter 11 preceedings. Here’s what’s going on:

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INSY Announces Interim Approvals In Bankruptcy Court

In a press release issued early this morning, Insys Therapeutics announced that the interim approvals of its First Day motions were received on June 11, 2019. So, why is this a big deal?

The First Day motions approvals allow the company to continue its existing cash management system in order to collect and disburse cash generated by the business. The court approval also allows the company to continue paying employee wages and benefits as well as maintain programs that are offered to customers. Finally, the company received approval to continue paying vendors and other providers essential to its operations.

In a statement, Andrew G. Long, CEO at INSY, had the following to offer:

This is an important step forward in our court-supervised process, which is intended to fairly and transparently address the Company’s legacy legal liabilities. I would like to thank our team for their continued hard work and dedication as we move forward with our asset sale process.

This Is An Important Win For Insys Therapeutics

At the end of the day, today’s news is very important for Insys. Reading between the lines tells us that the bankruptcy court is allowing the company to continue its day to day operations. This will take place without any restricting holds on cash, keeping employees, vendors, and customers maintained as if the bankruptcy weren’t taking place.

What Was The Deal With The Charges That Started All Of This?

Insys Therapeutics is the company behind an opiod medication known as fentanyl. As with most opiods, the treatment is indicated to treat pain and is known to be highly addictive. Unfortunately, to sell the product, Insys management made the wrong news.

Ultimately, the company was found guilty of fraud. The fraud related to kickbacks that INSY provided to doctors that prescribed its medication. Essentially, giving a doctor a bias to prescribe an addictive medication through payment creates a conflict of interest for the doctor, a danger for the patient, and is believed to have played an integral role in the opiod epidemic that we’re seeing across the nation today.

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Final Thoughts

There is a long road ahead for Insys Therapeutics. With the settlement driving the company to bankruptcy, there are more uncertainties than there are certainties in this situation. Nonetheless, today’s news was a big win for the company, suggesting that there will be light at the end of the tunnel.

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