US drugmaker Insys Therapeutics has gone into bankruptcy after reaching a $225m settlement in the US last week.
The company said this morning it was filing for so-called Chapter 11 protections.
It will use the bankruptcy to sell more than three-quarters of the company’s assets within 90 days to pay off its legal costs.
“After conducting a thorough review of available strategic alternatives, we determined that a court-supervised sale process is the best course of action to maximise the value of our assets and address our legacy legal challenges in a fair and transparent manner,” said chief executive Andrew Long
Last week Insys pleaded guilty in a US court after bribing doctors to prescribe more of its Subsys opioid painkiller.
It will pay a $2m fine, settle the charges for $195m, and forfeit $28m.
The company had used kickbacks and illegal marketing to boost sales of the medication, prosecutors said.
“For years, Insys engaged in prolonged, illegal conduct that prioritised its profits over the health of the thousands of patients who relied on it,” US attorney Andrew Lelling said.
Chapter 11 will allow the business to continue operating while giving it a chance to reorganise its debts. It gives the company a fresh start.
Insys said it will continue to pay employees during the process.
In May the company warned it may seek bankruptcy after the probes.
Its shares have tanked 83 per cent to $1.31 since August last year.