Debra Borchardt
Insys Therapeutics (INSY) delivered its earnings today after the market close and following an earlier announcement that it had settled with the Department of Justice. Insys said that it had agreed to pay $150 million over five years and “with the potential for contingency-based payments associated with certain events that, if they were to occur, management estimates would require additional payments ranging from $0 to $75 million.”
The settlement was related to the DOJ’s civil and criminal investigation into inappropriate sales and commercial practices by some former company employees. Saeed Motahari, president and chief executive officer of INSYS Therapeutics said it was a “very important step for our company to move forward and continue our transformative efforts to foster a compliant and ethical culture.”
With regards to the company’s second-quarter earnings, Insys delivered gross revenue of $38 million versus last year’s $58.2 million for the same time period. Net revenue was $23.5 million, which missed analyst estimates by $2.4 million and fell dramatically from last year’s $42.5 million. The drop was blamed on lower gross revenue and returns of expired product.
The earnings per share for the quarter were for a loss of 33 cents, which missed analysts estimated by 17 cents. Gross margin was 84.7% for the second quarter of 2018, compared to 90.8% in the same period of 2017.
“Our continuing commitment to the potential of CBD and our nasal spray technology to significantly improve the lives of patients was highlighted by several important milestones in the second quarter of 2018, as we continue to make progress against our strategic plan,” said Motahari. “We received encouraging results from our pharmacokinetics study of epinephrine nasal spray and initiated a Phase 2 study of CBD for Prader-Willi Syndrome. Furthermore, we believe we remain on track to submit an NDA for naloxone nasal spray by the end of 2018. These critical milestones are in keeping with our long-term goal to submit one NDA per year through 2021.”
Motahari added, “Albeit off a small base, prescriptions of SYNDROS experienced a solid improvement in the second quarter as net revenue improved 56 percent sequentially, driven by the initial success of our patient access and educational programs. We remain resolute in our commitment to patients who rely on SYNDROS and SUBSYS and believe our product pipeline has the potential to significantly improve the lives of patients with unmet medical needs—particularly our two life-saving drug candidates, epinephrine and naloxone nasal sprays.”
Insys hasn’t had a very good stretch here lately. On July 27, the FDA decided not to approve Insys’ drug buprenorphine sublingual spray to treat pain as an alternative to opioids. The stock got slapped down almost 9% at one point as a result. It began to recover in early trading on Wednesday ahead of the earnings running up 17% to close at $7.79 per share but is sliding 6% in the after-hours trading following the earnings miss.
