Debra Borchardt
Insys Therapeutics reported its third-quarter earnings as the scandal-ridden biotech company missed revenue and earnings estimates. Net revenues of $30.7 million fell short of analysts estimates as calculated by Yahoo! Finance by $6 million and fell from last year’s $57.8 million as the company noted that the net revenues were impacted by $5 million due to product returns.
The company posted a net loss of $166.3 million or a negative $2.30 per basic share. Most of this was due to $150 million that the company has set aside in connection with the ongoing Department of Justice investigation. Just last week, former Insys executives were arrested (some for a second time) over a kickback scheme associated with the company’s fentanyl drug Subsys. The NASDAQ exchange where the company is listed halted trading until Tuesday.
Chief Financial Officer Andrew long said this on the earnings call about the DOJ, “This amount represents our best estimate of the minimum liability that we expect to pay over a period of 5 years in order to resolve this matter. I want to be clear that we do not currently have a deal with the Department of Justice and that there is no guarantee of a deal. And while we can’t predict the timing or outcome of this investigation at present, if the final settlement were to come in around this amount and payment period, based on our current expectations, we believe that it would enable us to meet our cash flow needs without needing to raise capital for this issue.”
Trading has since resumed and John Kapoor, the company’s founder, and former CEO resigned from the board of directors. Insys is trying to focus the market on its other drug Syndros, which was launched this past summer. This dronabinol oral drug generated $0.7 million in its first two months. The company also said in the earnings statement that it filed an NDA (new drug application) for buprenorphine for pain and completed a study of a nasal spray to treat opioid overdose.
“The past few months have only strengthened our commitment to move forward and continue our efforts to address unmet medical needs,” said Saeed Motahari president and chief executive officer of INSYS Therapeutics. “In the third quarter, our team soundly executed against the organization’s strategic initiatives and we made strong progress to transform and diversify our business over the long term. This included further work to stabilize our SUBSYS product through the signing of additional managed care contracts. These wins should help solidify the product’s base revenue beginning in 2018.”
The stock was lately trading at $5.14.
