Beleaguered Insys spending $24M on manufacturing expansion

Insys Therapeutics is expanding its Texas manufacturing site even as its brings on a new CEO and deals with Indictments tied to an alleged bribery scheme for its addictive sublingual fentanyl spray. (YouTube/Insys Therapeutics)

Insys Therapeutics is scrambling to right itself after being knocked akilter by an indictment claiming its former CEO and a group of other ex-top execs bribed doctors to prescribe its Subsys painkiller. But the legal turmoil has not stopped the drugmaker from adding capacity to a Texas manufacturing site.

Insys is completing a 30,000 square-foot expansion at its manufacturing site in Round Rock, Texas. The company is investing $24 million to outfit the operation and add an undefined number of jobs, the Red Rock Chamber announced.

In 2013, the Chandler, Arizona-based company received financial incentives from Round Rock for its $10.5 million expansion into a larger manufacturing facility in the Texas town. That was a year after it had gotten FDA approval of Subsys, the sublingual fentanyl spray that is at the heart of its legal turmoil.

In December, federal prosecutors secured an indictment against former CEO Michael Babich and top sales execs alleging they “led a nationwide conspiracy” to bribe doctors to boost scripts. Subsys was approved by the FDA specifically to treat cancer-related pain but the indictment accused them of using bribes and other means to get doctors to prescribe the highly addictive drug for off-label uses.

The drugmaker today announced that it hired Saeed Motahari, chief commercial officer at pain drug producer Purdue Pharma, to take on the CEO role at Insys. He previously worked for Abbott and AbbVie.

The drugmaker this month also said it would have to delay release of its 2016 financials during an independent audit of its 2016 sales that could result in a restatement that was not expected to exceed $5 million.