Insys Therapeutics Inc. (NASDAQ:INSY) Sued
Insys Therapeutics Inc. (NASDAQ:INSY) sentiments on Wall Street turned from bad to worse, after the embattled specialty pharmaceutical company responded to claims it fraudulently marketed a powerful painkiller. Shares of the company fell 9.35% to end Tuesday’s trading session at three-year lows.
Insys Therapeutics ‘’Fraudulent’ Practices
Investor confidence on the stock continues to hit lower lows after the New Jersey Attorney General accused the company of engaging in a conduct that is ‘nothing short of evil”.
A sell-off wave has pushed the stock to this year’s lows as it continues to trade in a strong downtrend. Insys Therapeutics Inc. (NASDAQ:INSY) is down by more than 10% for the year in an industry that is experiencing strong share growth.
Insys Therapeutics Inc. (NASDAQ:INSY) finds itself in hot water for allegedly directing its sales force to have doctors prescribe its drug, Subsys, for any chronic pain. A point of concern is that the drug was approved only for cancer patients who could not benefit from other opioids.
The lawsuit by New Jersey Attorney General, Christopher Porrino, also alleges that the company paid kickbacks, including sham speaker fees, to medical practitioners as it sought to push for more Subsys prescriptions.
The attorney general’s lawsuit insists that Insys Therapeutics Inc. (NASDAQ:INSY) put hundreds of lives in jeopardy with the illegal practices. One fatality has been reported of a woman who was prescribed Subsys for the treatment of fibromyalgia.
Insys Therapeutics Defense
Insys has quashed the allegations reiterating that Subsys prescription represented about 0.02% of the opioid prescriptions in the U.S. last year. The company says it is working with relevant authorities to resolve issues related to inappropriate action taken by its staff.
“The company is under new management and has replaced 90 percent of the original sales force and commercial organization. While understandable, it’s disingenuous to repeatedly demonize a company that has made a firm and sincere commitment and is taking all the necessary steps to conduct business according to high ethical standards,” Insys Therapeutics in a statement.
Insys Therapeutics Inc. (NASDAQ:INSY) employs about 400 people including scientists, researchers, and physicians who it says are dedicated to coming up with treatment options for various unmet patient needs. However, the company remains under intense scrutiny at a time when opioid abuse is a major public health issue. According to the U.S. Centers for Disease Control and Prevention, there were 33,000 deaths associated with opioid abuse in 2015.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.