Insys Therapeutics has been given the green light to sell its Subsys opioid product – the focus of racketeering charges that forced the company to file for bankruptcy – to BTcP Pharma.
Back in June, Insys became the first company to file for bankruptcy in connection with the US opioid epidemic, shortly after agreeing a $225m payment to settle charges it bribed doctors to prescribe Subsys.
Since then, Purdue Pharma has also filed for Chapter 11 protection as it tries to secure agreement for a massive $10bn-$12bn settlement relating to its alleged role in the opioid crisis, while Mallinckrodt has also been reported to be at risk as it tries to pursue its own settlement deals.
Subsys is a sublingual spray formulation of fentanyl, a highly-potent opioid analgesic that is approved to treat end-stage cancer pain, and is being sold to try to raise cash to satisfy creditors and provide funds for settlement of thousands more outstanding lawsuits.
Earlier this year, five former Insys executives including founder and chairman John Kapoor were convicted of racketeering conspiracy after being found guilty of encouraging widespread, off-label use of the product by providing inducements to doctors.
Wyoming-based BTcP Pharma, which is part of the MMB Healthcare network of pharmaceutical companies, has agreed to take over the sale and distribution of the drug and pledged to only market the drug for use in its approved indication.
It will also take on limited debts related to the Subsys product, but won’t assume liability for “fines, judgments, settlements or other liabilities owed to the Department of Justice or other governmental entity” – in other words the $225m federal settlement.
Insys will receive a 45% royalty rate on profits from Subsys, which it estimates could reach around $20m – only a fraction of the amount being sought by claimants that also include states, municipalities and Native American tribes, as well as to insurers and hospitals affected by the racketeering.
The company estimates that its potential liabilities could be as high as $4bn, far in excess of any amount raised during its liquidation.
Other assets held by the company include Syndros, a liquid dronabinol product approved for chemotherapy-induced nausea and vomiting in patients who don’t respond to other drugs, as well as a naloxone nasal spray formulation and a sublingual spray formulation of buprenorphine in development. The buprenorphine spray product was however rejected by the FDA last year.