Entering text into the input field will update the search result below

Insys: Earnings Preview

Shock Exchange profile picture
Shock Exchange


  • INSY reports quarterly earnings after hours.
  • The company's revenue from opioid drug subsys has been in free fall. It is also bleeding cash.
  • Its $122 million in cash and equivalents can only last so long.
  • Do its burgeoning legal exposures outweigh its current franchise and drug pipeline? That's the question facing investors.
  • I rate INSY a hold into earnings.

Insys Pharmaceuticals (INSY) reports quarterly earnings after hours. Analysts expect revenue of $29 million and EPS of -$0.14. The revenue estimate is slightly below the $31 million the company reported last quarter. Investors should focus on the following key items:

Revenue Is In Free Fall

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. The company received FDA approval for the drug in 2012.

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 received FDA approval for the drug in 2016.

Insys's main product, subsys, has been in free fall. Q3 revenue from the drug was $30 million, down 48% Y/Y. Annual sales peaked at $329 million in 2015, which equates to a quarterly run rate of about $82 million.

The U.S. is suffering from an opioid crisis and subsys is in the middle of it. Drug overdoses have surpassed car accidents as the No. 1 cause of accidental deaths in America. Many also believe the spike in drug overdoses has been driven by a proliferation of prescription opioids. In turn, the government has attempted to tamp down the number of opioid prescriptions. The hit to subsys has been two-fold. The number of opioid prescriptions has been cut. Secondly, there have been complaints that subsys - designed to treat critical care cancer patients - has been used to treat non-cancer patients. To the extent subsys becomes limited to only treat critically care cancer patients, I expect its revenue to continue to decline.


This article was written by

Shock Exchange profile picture
The Shock Exchange has a B.A. in economics and MBA from a top 10 business school. He has over 10 years of M&A / corporate finance experience. Currently head the New York Shock Exchange, financial literacy program based in Brooklyn, NY.His book, "Shock Exchange: How Inner-City Kids From Brooklyn Predicted the Great Recession and the Pain Ahead", predicted pain ahead for the U.S. economy and financial markets.In 2014 the law firm of Kirby, McInerney, LLP brought a class action lawsuit against Molycorp, Inc. for "materially misleading statements" in its financial statements. Kirby, McInerney used investigative journalism from the Shock Exchange to buttress its case. That's the discipline the Shock Exchange brings to every situation he covers for SA.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (8)

Shock Exchange profile picture

You are more than welcome.

Dimitri Ratz profile picture
Great article, thank you.
Active Investor Alliance profile picture
SE, every intend you have so far is short, I am shocked that you recommend "hold"
Me XMan profile picture
I wouldn't mind picking up at $5-6 level.
Shock Exchange profile picture
Me XMan,

Are you trying to bottom fish on MNK too?

Me XMan profile picture
Yup. EBITDA=Market cap=No brainer. Good drugs pipeline. 1/3 float shorted=fireworks.
I agree with you me xman
Plato Management profile picture
Hey there...read your preview...their cash and equivalents was $177mm last quarter. You need to include there investments that are over 1 year.
You also mixed up the NDA they filed for Buprenorphine. It is for severe to moderate pain. Their opioid overdose drug is expecting an NDA filing this year.

But i think the gist of your argument is correct at this point. Its the pipeline versus settlements at this point. I think any settlement around where they have accrued would be a huge boost to the stock as it would remove uncertainty.

I also like their new management team and the way they are facing their challenges head-on.

Any revenue above $30 million for the quarter would be a positive in my books. More interesting will be to see the Syndros revenue. Hopefully, it is greater than the $700K from last month.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.