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The Company made this announcement with respect to the complaint filed by the New Jersey Attorney General on October 05, 2017. New Jersey accused INSYS of engaging in a fraudulent scheme to boost sales of a fentanyl-based cancer pain drug. The lawsuit by Christopher Porrino, New Jersey’s Attorney General, states that INSYS illegally directed its sales force to push prescriptions of Subsys for a wide range of patients that the opioid drug was approved to and at doses higher than the permissible limits.
INSYS has been facing a similar lawsuit from Massachusetts’ Attorney General, Maura Healey, where INSYS would pay $500,000 to resolve similar allegations. Healey once stated that Fentanyl is a powerful and highly addictive drug with fatal consequences. However, INSYS aggressively marketed its product and made illegal payments to boost sales.
INSYS announced that the Company is under new management and has replaced 90% of the original sales force and commercial organization. The Company stated that it finds the lawsuit understandable, yet disingenuous, for a firm that has been taking steps to conduct business according to standards. The Company also finds the lawsuit unfair to its current employees, a majority of which are new to INSYS and had no involvement in the previous cases.
The Company stated that it currently employs over 400 people and has invested over $250 million over the past 5 years in research and development (R&D), which enables delivery of new treatment options for unmet medical needs. INSYS has been constantly placed at the center of investigations, focused on Subsys, an under-the-tongue spray intended for cancer patients that contains fentanyl, a highly addictive synthetic opioid.
Company Growth Prospects
Prior to the announcement, on October 03, 2017, the Company reported that it recently completed the pharmacokinetics study of its proprietary intranasal spray formulation for the treatment of opioid overdose, which showed favorable results, similar to the ones for the current standard of intramuscular administration of naloxone. Naloxone, according to the Company, has been used in opioid overdose management for more than 40 years. It works by rapidly displacing the intoxicating opioids from the brain’s opioid receptors, reversing the clinical signs of opioid overdose. Naloxone was first approved in the US in 1971, as Narcan injection to reverse opioid intoxication and overdose.
Last Close Stock Review
At the close of trading session on Monday, October 09, 2017, INSYS Therapeutics’s stock price declined 2.26% to end the day at $8.66. A total volume of 615.60 thousand shares were exchanged during the session, which was above the 3-month average volume of 564.71 thousand shares. At Monday’s closing price, the stock’s net capitalization stands at $645.43 million.
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