Insys Therapeutics, Inc. (NASDAQ:INSY) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On Sunday, October 29, 2017, Insys Therapeutics, Inc. (the “Company”) accepted the resignations of Dr. John N. Kapoor and Patrick P. Fourteau from the Company’s Board of Directors (“Board”).Such resignations are effective immediately and include all Board committees upon which each of them served.Dr. Kapoor and Mr. Fourteau indicated that each of their respective decisions to resign was not a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.The Board has not, at this time, filled the vacancies caused by such resignations.
Item 8.01 Other Events.
On Thursday, October 26, 2017, the U.S. Attorney’s Office for the District of Massachusetts issued a superseding indictment against Dr. John N. Kapoor and included him in charges against six former employees of the Company, including racketeering conspiracy, conspiracy to commit mail fraud, conspiracy to commit wire fraud and conspiracy to violate the Anti-Kickback Statute.
On Sunday, October 29, 2017, the Company issued a press release announcing that, as of Sept. 30, 2017, $150 million has been accrued as a reserve in connection with the Department of Justice (“DOJ”) investigation, which represents the Company’s best estimate of the minimum liability exposure the Company expects to pay over five years in connection with this matter.The Company did not recognize any tax benefit relating to this accrual because at the time it did not have sufficient information to make a determination regarding tax deductibility.This estimate reflects a minimum exposure at which management has determined a willingness to settle these matters. The DOJ has not accepted management’s offer, and there can be no assurance that future discussions with the government to resolve these matters will be successful, that the approvals needed will be obtained or that any potential settlement will be agreed to on terms and conditions acceptable to the Company or the DOJ.The Company is unable to predict when these matters will be resolved or what further action, if any, the government will take in connection with them.Based on the ongoing uncertainties and potentially wide range of outcomes associated with any potential resolution of the matter under investigation by the DOJ, the ultimate amount of potential liability may materially exceed the $150 million accrual the Company has established.
About Insys Therapeutics, Inc. (NASDAQ:INSY)
Insys Therapeutics, Inc. is a commercial-stage specialty pharmaceutical company. The Company develops and commercializes supportive care products. The Company’s product Subsys, is a sublingual fentanyl spray for breakthrough cancer pain (BTCP) in opioid-tolerant patients and a single-use product that delivers fentanyl, an opioid analgesic, for transmucosal absorption underneath the tongue. The Company markets Subsys through its field sales force focused on supportive care physicians in the United States. Subsys delivers a liquid fentanyl formulation in approximately 100, 200, 400, 600, 800, 1,200 and 1,600 micrograms (mcg) dosages. The Company’s lead dronabinol product candidate is Syndros, which is under review for approval at the Food and Drug Administration. In addition, the Company is evaluating sublingual spray, inhaled and intravenous formulations of dronabinol in preclinical studies.