Is More Pain Ahead For Insys Therapeutics Inc (NASDAQ:INSY)?
Since a series of investigative journalism articles that outed the firm’s debatable tactics in selling its tremendously potent opioid, ‘Fentanyl’, Insys Therapeutics Inc (NASDAQ:INSY) stock has been in a descending spiral.
With the arrest and accusation of the firm’s former CEO, and the firm’s response that it continues to be probed, gives a hint that there lies extreme risk to take any position in company’s stock. Michael Babich, the former CEO, was arrested on accusations of racketeering and purportedly running a plan to unlawfully sell fentanyl to folks who may not have required it.
Six former managers and executives at Insys were arrested and charged with scheming to deceive health insurers and induce doctors in lieu for prescribing the firm’s fentanyl painkiller, ‘Subsys.’ Among the arrested executives were ex CEO Babich, who left the firm last year in November. Babich was charged with scheme to implement racketeering, plan to perform mail and wire fraud, and conspiracy to breach the anti-kickback law.
The wire fraud, mail fraud and racketeering charges each necessitates fines, imprisonment and supervised release. Breach of the anti-kickback act carries up to 5 years in prison. The complete piece of complaint submitted by the U.S. government is increasingly disturbing.
Even more exciting than the DOJ PR was the firm’s successive statement announced last week. Essentially, Insys established an ongoing probe into the firm was still being performed. The company stated that the charges against folks mentioned in the DOJ PR relate to previously announced probes. Insys continues to work in coordination with all applicable authorities in its underway probes and is dedicated to complying with regulations and laws that govern their business and products practices. Insys will not offer additional comments or information at this time on respective matter.
In the last trading session, the stock price of Insys Therapeutics declined over 1% to close the week at $9.09.