Insys stock drops 27% after auditor questions company's viability

Sarah Toy - finance.yahoo.com Posted 5 years ago

Shares of opioid maker Insys Therapeutics Inc. dropped 27% on Wednesday after the company disclosed in a securities filing that an auditor had raised substantial doubt about its ability to continue as a going concern. The company's founder, John Kapoor, and several former executives have been accused of bribing doctors to prescribe its drug Subsys, a sublingual fentanyl spray approved by the FDA for a specific type of cancer pain. Fentanyl is an opioid that is up to 50 times more powerful than heroin. In August, the company agreed to pay $150 million over the next five years and a potential $75 million in additional payments to settle charges brought against it by the U.S. Department of Justice. The company's fourth-quarter operating expenses increased to $62.7 million from $47.5 million the year before, with much of the difference due to legal expenses. Although the company does not have any outstanding debt and currently has $104.1 million in cash, it said expects continued negative cash flows. As of December 31, Insys had an accumulated deficit of $336.1 million. Insys has two marketed products: Subsys, the fentanyl product, and Syndros, an orally-administered form of dronabinol for treating nausea and vomiting associated with chemotherapy. The company is also working on a naloxone nasal spray, epinpehrine nasal spray and cannabidiol oral solution for several indications including epilepsy in children. Shares of Insys have fallen 17% in the past three months, while the S&P 500 has gained 6.1%.

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