As costs continue to mount from opioid litigation, Insys Therapeutics faces the risk of going out of business, according to Bloomberg.
An auditor for Insys has raised substantial doubt about the drugmaker's ability to continue as a "going concern," the company said in a securities filing March 13.
The auditor's opinion, based on the financial statements for the year ended Dec. 31, 2018, flags uncertainty in Insys' ability to generate enough cash to meet its legal obligations and sustain operations.
This year, Insys has spent millions to defend former executives in court who face criminal charges for allegedly bribing physicians to write prescriptions for its powerful opioid painkiller Subsys. In 2018 alone, the company spent about $54 million in legal fees, $25.7 million of which went toward the defense of its billionaire founder and ex-CEO John Kapoor.
To generate cash, and in an effort to pivot from opioid-based painkillers, Insys said it would divest Subsys and invest in products related to cannabis.
The company is considering spin offs, strategic partnerships, joint ventures, restructurings and new investments. If it is unable to secure new funding the company will "curtail some or all of our product development, commercialization and strategic plans."
"If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our audited consolidated financial statements, and it is likely that investors will lose all or a part of their investment,” the company said in the filing, according to Bloomberg.
The news sent Insys' shares plummeting 13 percent March 13, according to Reuters.