INSYS Therapeutics Inc. received U.S. court approval for its bankruptcy plan to sell the company and pay off creditors, The Wall Street Journal reported.
According to the report, the opioid drugmaker — the first to file for bankruptcy in the aftermath of the ongoing U.S. opioid crisis — will pay up to 8 cents on average for every dollar it owes. The plan was approved by U.S. Bankruptcy Judge Kevin Gross in Wilmington, Del., and will result in Insys' shareholders losing their investments. The settlement also prevents Insys' shareholders from suing those that guided the company into bankruptcy.
In June 2019, Chandler, Ariz.-based Insys filed for bankruptcy after it agreed to pay $225 million to settle investigations over unlawful marketing practices involving its opioid painkiller Subsys. Insys sold the rights to Subsys, as well as other assets, following the bankruptcy, but the sales are not enough to repay more than $1 billion the company owes to creditors.
The chapter 11 plan helps debtors reorganize a business to pay back creditors over time.
Insys pleaded guilty to allegations that it paid doctors kickbacks and used other fraudulent marketing practices to boost the sales of its highly addictive painkiller Subsys.
A number of companies, including Mallinckrodt PLC and Teva Pharmaceutical Industries Ltd., have reached settlements with states to resolve claims that certain marketing practices fueled the opioid epidemic, which kills about 200 Americans each day.