Insys Therapeutics (NASDAQ:INSY) continues to struggle as the company reported a 40% drop in revenue for the first quarter and a net loss of $6.5 million. In addition to the challenging quarter, new faces have entered the C-suite to revamp the company and move forward from its past mistakes.
Net revenue totaled $36 million, a decline from last year's $60.4 million and missing the Capital IQ Consensus for $37 million. They also reported a net loss of $6.5 million or 9 cents per share compared to last year's $2.3 million, but beat the Capital IQ Consensus for a loss of 10 cents per share. Saeed Motahari became the new President and Chief Executive Officer in April and Steven James signed on as the new Vice President of Medical Affairs.
Saeed said that the company was working towards a resolution in the Department of Justice investigation, a major public relations nightmare that has held the company back for some time. The company is enduring a widely reported problem of giving sketchy doctors kickbacks for prescribing its very addictive and very strong painkiller Subsys. It also turns out that the sales manager pushing the prescriptions, Jeffrey Pearlman was addicted to the drug himself according to court documents. Subsys prescriptions, which had been its main source of revenue have plunged, and because of all the negative publicity are unlikely to recover to previous levels.
Insys Therapeutics is considered by some to be a mainstream approved cannabis drug company. Its cannabidiol oral solution has been part of a long-term study for patients with pediatric epilepsy. Its THC drug Syndros received a DEA scheduling as a Schedule II drug, which limits its popularity among doctors. Syndros is seen as a competitor to Marinol in the cannabis space, but Marinol is a schedule III drug and the problems with Marinol are being addressed by other biotech companies.
Although some categorize Insys as a cannabis drug, many in the medical marijuana community have been put off by Insys' efforts to combat legalized medical marijuana. The company has donated to those efforts in some states.
Saeed is trying to resolve the past and focus on the future saying, "This year, we believe we are poised to grow our commercial portfolio from one to two products, file an NDA for buprenorphine, and significantly advance our pipeline of products across both our sublingual spray and cannabinoid platforms."
Investors for the most part are staying away while the company tries to move past its problems. It has some cushion for now with $218 million in cash and no debt, but the stock has plunged 19% for the past year and was lately trading at $10.68.
The company will be hosting a conference call later this morning at 10am.
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