Insys is a specialty pharmaceutical company that manufactures and markets two main drugs – subsys and syndros. Subsys delivers fentanyl, an opioid analgesic offered in mcg doses ranging from 100 to 1,600. Fentanyl is offered for the treatment of breakthrough pain caused by cancer (“BTCP”) in opioid-tolerant patients. Syndros oral solution is approved for the second-line treatment of chemotherapy-induced nausea and vomiting (“CINV”) and anorexia associated with weight loss in patients with AIDS.

The company’s total revenue has been in free fall. Q2 2018 Revenue fell about 45% Y/Y, but was only off 2% sequentially. This implies sales for subsys may have bottomed after the drug was over-prescribed over the past few years. Management believes subsys can still effectively address breakthrough pain suffered by cancer patients. In the past the drug was prescribed for non-critical-care cancer patients, leading to a spike in revenue.

Ballooning opioid prescriptions and addictions have gotten the attention of lawmakers. Some believe there is a correlation between opioid use and the sudden spike in drug overdoses. The number of Fentanyl-related overdoses has spiked so much that the National Institute on Drug Abuse has tracked Fentanyl-related overdoses separate from other drug overdoses. If the company can maintain quarterly revenue for subsys in the $20 to $25 million range it could be a victory.

The FDA awarded INSY fast track designation for epinephrine nasal spray to treat acute allergic reaction (anaphylaxis). If approved, it could generate additional revenue and help stem cash burn. Positive sentiment over INSY’s ability to deliver on its R&D pipeline could follow. Read more:

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