New York, June 5, 2026, 13:08 (EDT)
- Inotiv shares surged to nearly 21 cents in early afternoon, trading on volume topping 828 million shares.
- The company’s prepackaged Chapter 11 plan calls for wiping out roughly $326 million of debt and canceling existing common shares with no payout to holders.
- Inotiv said it plans to come out of bankruptcy as a private company in about 50 days, if the court approves.
Inotiv Inc. shares jumped more than 100% Friday, with the penny stock seeing heavy trading despite a warning that its restructuring plan might wipe out current holders. Shares were at $0.2113, up $0.1247, after trading in a wide range from $0.0801 to $0.2969. About 828.8 million shares changed hands.
Inotiv filed for Chapter 11 two days ago, starting a bankruptcy process that lets it keep running as it works to sort out debts. What’s different with this filing is that the plan isn’t just about refinancing. If the court signs off, creditors will get ownership and Inotiv will go private.
Inotiv said its prepackaged bankruptcy plan, worked out ahead of the filing with key creditors, will slash funded debt by around $326 million via a debt-for-equity swap. The company said big holders of first-lien loans, PIK notes, and convertibles backed the plan and had already voted for it before the bankruptcy filing.
The company has arranged $65.4 million in debtor-in-possession financing. That breaks down as $25 million in new funds and a $40.4 million roll-up from earlier bridge loans. The company said it expects to secure an exit term-loan facility for as much as $150 million after Chapter 11.
Inotiv president and CEO Bob Leasure said talks with the company’s financial stakeholders have led to a “path forward.” Leasure said the actions will give Inotiv “additional flexibility” as it works on its strategy.
Debt was already pressuring the West Lafayette, Indiana-based contract research firm. The CRO, which outsources drug discovery and preclinical testing, reported about $488.7 million in funded debt at the petition date, according to a disclosure statement. Inotiv also had around $27.5 million in interest expense for the first half of 2026.
Inotiv’s filing flagged competitive heat in its sector. The company said contract research and research-model markets stay tough, with competition from big public players and in-house pharma labs, and noted that some rivals hold more capital and technical muscle. On Friday, the bigger life sciences services stocks were split: Charles River Laboratories dropped roughly 1.3%, IQVIA lost 1.6%, and Labcorp ticked up 1.3%. The iShares Russell 2000 ETF dropped 2.6% and SPDR S&P Biotech ETF slipped 2.2%.
But there’s a big warning with the rebound. Inotiv said trading its securities while in Chapter 11 is “highly speculative” and the restructuring plan calls for wiping out all existing equity — common stock — with no payout for current holders. The company also said there’s no guarantee the restructuring will close.
Nasdaq risk has been hanging over Inotiv. The company said in January that it got a notice from Nasdaq about noncompliance with the $1 minimum bid rule. Shares didn’t close above a $1 bid for 30 business days. The initial deadline to fix this is June 29. SEC
The next move looks set to come out of bankruptcy court, not from the usual earnings cycle. Under the restructuring deal, milestones include three days to secure interim financing approval and a case calendar after the filing, 45 days for both final financing and court confirmation, and the plan supposed to take effect in 50 days.
