Bankruptcy
Purdue Pharma may file for bankruptcy this week after negotiations over a multi-billion opioid claims settlement have stalled, multiple sources are reporting.
Late Wednesday, the company said it is looking to facilitate the sale of its business products in development, as well as its technology.
Citing unnamed sources “familiar with the matter,” Reuters said that the company will have no choice but to file for bankruptcy should a settlement not be agreed upon.
The bankruptcy announcement comes weeks after Insys founder John Kapoor and four former executives were found guilty of orchestrating a kickback scheme to boost sales of its powerful opioid Subsys.
Insys owes more than $240 million in legal-related fees but the company only has about $87 million in available cash.
The company announced it is seeking authorization to pursue both an auction and sale under the U.S. Bankruptcy Code.
Shares of Insys plunged more than 25 percent in trading Wednesday after the company said in a filing with the U.S. Securities and Exchange Commission that it could soon run out of revenue and may have to resort to liquidating its assets.
As Purdue Pharma grapples with multiple lawsuits over its OxyContin pain killer, there are reports that the drugmaker is exploring bankruptcy as a legal defense mechanism.
The season surrounding Valentine’s Day brings out the love in many people, but for two pharma companies, this year was a year of heartbreak. California-based Aradigm Corporation and New Jersey-based Immune Pharmaceuticals both filed Chapter 11.
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