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Insys founder resigns from board after charges in US opioid bribe case

Insys founder resigns from board after charges in US opioid bribe case
October 30, 2017

NEW YORK (Reuters) - The billionaire founder of Insys Therapeutics Inc, John Kapoor, has resigned from the company’s board of directors, Insys said in a statement on Sunday.

Kapoor was arrested on Thursday on US charges he participated in a scheme to bribe doctors to prescribe a fentanyl-based cancer pain drug, marking a step by authorities to fight the opioid epidemic.

“I am confident that I have committed no crimes and believe I will be fully vindicated after trial,” Kapoor said in a statement on Sunday.

Insys, which has previously disclosed that it was working to resolve a US Justice Department probe, said on Sunday it has recorded $150 million as of Sept. 30 as its “best estimate of the minimum liability” to settle the investigation.

The department has not accepted the company’s offer, Insys said in a statement.

Kapoor, Insys’ majority shareholder who stepped down as chief executive in January, was charged with engaging in conspiracies to commit racketeering, mail fraud and wire fraud in an indictment filed in federal court in Boston.

Insys board member Patrick Fourteau, who has served since 2011, has also resigned “for personal reasons,” the company added.

The charges against Kapoor marked a major escalation of investigations related to Subsys, an under-the-tongue spray that contains fentanyl, an addictive synthetic opioid. They came as US President Donald Trump on Thursday declared the opioid crisis a public health emergency.

Kapoor was added as a defendant in a case against six former Insys executives and managers, including former Chief Executive Michael Babich. Following a court hearing in Phoenix, Kapoor, 74, was released on a $1 million bond.

Kapoor said on Sunday that his continued involvement with Arizona-based Insys would draw unnecessary attention to the company.

He plans to put his shares in a trust that will be independently controlled, he said.

“We will continue to cooperate with ongoing investigations and strive to resolve them as circumstances permit,” Insys President and Chief Executive Officer Saeed Motahari said in a statement on Sunday. Nasdaq Inc on Thursday, said it had halted trading in Insys for “additional information requested.” Insys’ stock price fell 22.64 percent to close at $5.74 on Thursday.