Robbins LLP: Insys Therapeutics, Inc. (INSY) Misled Shareholders According to a Recently Filed Class Action
Robbins LLP announces that a class action complaint was filed against Insys Therapeutics, Inc. (NASDAQGM: INSY) in the U.S. District Court for the Southern District of New York. The complaint is brought on behalf of all purchasers of Insys securities between February 23, 2016 and March 15, 2017, for alleged violations of the Securities Exchange Act of 1934 by Insys’s officers and directors. Insys, a specialty pharmaceutical company, develops and commercializes supportive care products.
Insys Accused of Overstating Its Revenue and Misstating Its Sales Allowances
According to the complaint, in a series of filings with the U.S. Securities and Exchange Commission, Insys officials attested to the accuracy of the financial reporting and the disclosure of any material changes to the company’s internal controls over financial reporting. With respect to sales allowances, Insys stated that the company recognized “estimated product sales allowances as a reduction of product sales in the same period the related revenue is recognized,” but noted that “if actual future results vary, we may need to adjust these estimates, which could have an effect on product revenue in the period of adjustment.” The complaint alleges that Insys officials failed to disclose that Insys overstated its 2015 net revenue, misstated its sales allowances for 2016 and, accordingly, lacked effective internal controls over financial reporting.
On March 15, 2017, Insys announced that it would delay the release of its financial results for the quarter and year ended December 31, 2016. Insys further revealed that the Audit Committee of the company’s board of directors was reviewing the company’s processes related to certain sales allowances recorded during 2016, with a potential reduction of 2015 net revenue and pre-tax income not expected to exceed $5 million, as well as extended payment terms offered to certain customers during the third quarter of 2016. On this news, Insys’s share price fell $0.49 per share, or 4.64%, to close at $10.06 per share on March 16, 2017.
Insys Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.