Legal costs may force Insys into bankruptcy

Specialty drugmaker Insys said Monday that it may be forced to file for Chapter 11 bankruptcy because it can't afford the legal costs related to a U.S. Justice Department probe, and its shares plummeted on the news, according to CNBC.

Insys said it had $87.6 million in cash and cash equivalents at the end of March, which falls short of the $150 million tentative settlement the company made with the Justice Department to settle claims that it bribed physicians to prescribe Subsys, its opioid-based painkiller.

If Insys is unable to sell its portfolio of opioid-related assets — which it has been attempting to shed for several months — the drugmaker likely will file for bankruptcy. If the bankruptcy filing is made, investors would lose part or all of their investment, the company warned in its first-quarter earnings call.

Insys shares dropped sharply on the news. It was trading under $1 a share May 13, down 75 percent from a May 10 close of $3.60 a share.

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