Insys Therapeutics (NASDAQ:INSY) is back in the news this week, after agreeing last Friday to pay a $225 million settlement to resolve criminal investigations regarding its role in marketing opioids, an addictive painkiller. This week, we've seen INSY close at a record low after the opioid maker said it filed for bankruptcy after the settlement. But today, things have shifted in a new direction: INSY stock is up nearly 300%.
Here's why.
INSY Stock Shoots Up Nearly 300%
On Monday, June 10, Insys Therapeutics, a leading drug maker, filed for Chapter 11 bankruptcy protection after agreeing to pay $225 million to settle fraud charges. The news sent INSY stock lower on the market the following day, causing it to close at a record low of 14 cents Tuesday. But things are looking brighter today—as bright as they can be under the circumstances.
Today, INSY said it's obtained interim court approvals for its "First Day" motion connected to its bankruptcy filing. According to the Arizona-area company, it is able to continue paying not only its employees but its vendors as well. It is also allowed to continue its cash management system.
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"This is an important step forward in our court-supervised process," explained Andrew Long, Chief Executive of INSY.
The market seems to agree. On the news, INSY stock has jumped significantly. As of 11:03 AM EDT, INSY stock is trading at $0.4836 on the Nasdaq, putting it up 240%. Earlier in the day, INSY surpassed 300%.
Takeaway
Just because Insys Therapeutics has obtained court approvals does not mean the company is in the clear. Still, Mr. Long is right in saying it's an important step forward, and it's likely that both the company and investors are pleased to see INSY stock jump the way it has Wednesday after yesterday's trading day.
Moving forward, this is a story cannabis investors might want to add to their watch-lists.
What do you think about the news? Let us know your thoughts in the comments below!
Featured image: DepositPhotos © markusbeck
