March 13, 2019 / 3:36 PM / 9 months ago

Insys Therapeutics' auditor raises going concern doubts, shares drop

FILE PHOTO: Pharmaceutical tablets and capsules are arranged on a table in this picture illustration taken in Ljubljana August 20, 2014. REUTERS/Srdjan Zivulovic

(Reuters) - Insys Therapeutics Inc said on Wednesday its auditor raised doubts on the drugmaker’s ability to continue as a going concern, sending its shares down 13 percent.

The Arizona-based company said the auditor’s opinion on the audited financial statements for the year ended Dec. 31, 2018 flags uncertainty in its ability to generate enough cash to meet its legal obligations and sustain operations.

Insys said that while it is looking for ways to raise capital, it can provide “no assurances” on the success of its efforts or that it would resolve its liquidity issues and wipe out operating losses.

“If we are unable to obtain sufficient funding, we would need to significantly reduce our operating plans and curtail some or all of our product development, commercialization and strategic plans,” the company said in a regulatory filing.

Last week, Insys said it had hired Lazard to advise on its plans to explore strategic options and is in talks to divest its fentanyl sublingual spray Subsys.

The company had come under fire for its marketing practices related to Subsys, an opioid that is 100 times stronger than morphine.

Insys’ former Chief Executive Officer Michael Babich in January pleaded guilty to participating in a nationwide scheme to bribe doctors to prescribe the addictive opioid medication.

Shares of the company fell 13 percent to $4.94 in morning trading.

Reporting by Saumya Sibi Joseph in Bengaluru; Editing by James Emmanuel

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