Insys Therapeutics (INSY) Stock Gaining On Corporate Update

Insys Therapeutics INSY Stock News

Insys Therapeutics Inc (NASDAQ: INSY) is having an incredible trading session in the market today after issuing a press release in conjunction with a recent settlement with the Department of Justice. As a result of the news, the stock is up by more than 45%.

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INSY Stock Gains On Update

In an SEC filing issued today, Insys Therapeutics said that Steven Meyer, Chairman of the board, and Pierre Lapalme, board member, have decided to resign. The resignation comes just one day after the drugmaker settled with the United States Department of Justice.

The DoJ probed the company, looking for evidence that INSY was providing kickbacks for doctors that prescribed its highly addictive opioid treatment, known as fentanyl. Yesterday, an operating unit Insys plead guilty to fraud relating to the kickbacks, settling with the DoJ.

As part of the settlement, INSY has agreed to pay a fee of $225 million. The settlement was thrown into action on May 2, 2019, when a federal jury in Boston made the decision to convict five former executives of the company on racketeering charges for their part in the nation’s opioid epidemic.

In the SEC filing, the company said that the resignation decision was not the result of any disagreements in relation to the company’s operations, policies or practices.

Why Investors Are So Excited

Uncertainty associated with a criminal hearing is never a good thing. With the guilty plea, this uncertainty is behind us. Moreover, while $225 million sounds like a ton of money, the truth of the matter is that this fine is relatively small compared to what it could have been.

Moreover, those that took part in the issues in the first place have left or are leaving the company, cleaning up the management team and setting a strong foundation for future growth.

So, with a company this size, $225 million is a drop in the bucket. Now investors can look forward to the future with little by way of monetary cost associated with the past and those that led to this cost no longer part of the management team.

Moving Forward

Moving forward, I believe that Insys Therapeutics is one that’s worth watching. The company has several treatments on the market, generating meaningful revenue as we speak. Moreover, with the recent approval of Epidiolex for GW Pharma (GWPH), the chances of the company’s late-stage cannibidiol oral solution being approved for treatment of epillepsy, infantile spasms, and Prader-Willi sydrome are improving as well. Giving it an entrance into yet another high value market.

Moreover, with recent news, the company’s exposure to legal costs associated with its movement in the opiod space has been minimized. All in all, INSY could climb higher ahead.

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What Do You Think?

Where do you think INSY stock is headed moving forward! Join the discussion in the comments below!

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