NEW YORK, June 4, 2026, 18:04 (EDT)
- Inotiv shares dropped about 28% to $0.0866 after the company filed a prepackaged Chapter 11. The stock was recently trading at that level, down from the prior close.
- The plan calls for wiping out roughly $326 million in funded debt and cancelling all current equity with no payout, according to an SEC filing.
Inotiv Inc. shares dropped further into penny-stock range Thursday. The drug-research services firm rolled out a prepackaged Chapter 11 plan that wipes out existing shareholders, offering them no recovery.
The stock last changed hands at 8.66 cents, off roughly 28% from where it closed before. Shares moved in a range from 7.79 cents to 11.8 cents. Volume topped 15 million shares.
Inotiv is shifting gears. Instead of holding out for a rebound in earnings or hoping investors can stomach its high debt, the company has started a court-led process. Inotiv says this plan would cut about $326 million from its funded debt, swap a big chunk of its debt for equity in a restructured business, and pull Inotiv off the public market in around 50 days if everything sticks to schedule.
Chapter 11 is the U.S. bankruptcy process that lets companies keep running while reorganizing their debt. Inotiv said it expects to continue paying vendors and employees as usual and will keep operating as a debtor in possession, so management remains in charge under court supervision.
Larger contract-research and drug-development services stocks traded higher Thursday. Charles River Laboratories climbed roughly 3.3%. IQVIA added 2.7%. Medpace was up 1.7%. The rest of the market was mixed—Reuters/LSEG market data had the S&P 500 up 0.4%, the Nasdaq Composite off by 0.1% and the Dow up 1.7%. The selloff was specific to the company.
Inotiv president and CEO Bob Leasure said in the company’s release that Inotiv had “determined a path forward” after talks with major financial stakeholders. Leasure said the restructuring will provide the company “additional flexibility” for its plans.
Inotiv said the financing deal brings $25 million in new debtor-in-possession funding. That loan is for companies in bankruptcy. The announcement follows $40 million in bridge financing in May. An SEC filing showed the whole DIP package at $65.4 million, including $40.4 million from earlier bridge debt, and listed a possible exit term loan up to $150 million.
Inotiv told common shareholders in its filing that trading its stock during the bankruptcy is “highly speculative.” The company warned that current equity holders could be wiped out as the plan would cancel all existing equity without any payout.
Creditor recoveries move up the stack in the plan. First-lien lenders are set to get 93% of the new equity, with dilution possible, and also keep the remaining exit term loans. PIK noteholders and those holding unsecured convertibles would take a smaller share, splitting some new equity and warrants. The company expects to reinstate or leave the general unsecured claims unimpaired.
Inotiv offers nonclinical and analytical drug services and sells research models and related products to pharma, medical-device, academic and government customers. Reuters/LSEG data put its 2025 revenue at $513.0 million, with a net loss of $68.6 million. Total debt was $408.0 million.
Inotiv’s stock ran into a Nasdaq listing snag ahead of the bankruptcy news. Back in January the company said Nasdaq sent a noncompliance notice because shares were under the $1 minimum bid requirement. Inotiv (NOTV) has until June 29, 2026, to fix it by trading above $1 for 10 straight business days.
The Nasdaq timeline isn’t the only risk. Inotiv still needs a bankruptcy judge to sign off, plus final financing and to keep pace with plan deadlines. Inotiv’s filing also flagged that its projections are not promises. Court rulings, new financing, creditor moves, or a business hit could all change the outcome. Problems or opposition could squeeze liquidity, customers, or vendors further if the case stretches out or the plan stalls.
Ballots must be in by July 6 at 4 p.m. Central, with the restructuring support agreement aiming for the plan to go effective within 50 days of the June 3 petition—so, late July. The equity keeps trading while the filing says current shareholders are likely to be wiped out.
