Insys Therapeutics was expected by analysts to announce poor results for their third quarter. While the company is trying to convert into a cannabinoid-focused biotech with its cannabinoid drug Syndros, the company reported losses much higher than expected which did not affect this marijuana stock, not even one bit.
Insys had reported for the third quarter a 47% decline in net revenue, $30.7 million, from the previous year and a net loss of $166.3 million, or $2.30 per share.
The launch of Syndros did not meet the company’s expectations to be its saving grace from the Subsys scandal. Sales for Syndros, which treats chemotherapy-induced nausea and vomiting, and anorexia associated with AIDS, was about $700,000 which is nowhere near the anticipated annual $200 million. An amount clearly not enough compensate from the decreased revenue of the company’s previous star candidate Subsys.
While prescription were volumes decreased for Subsys, the company was receiving higher product returns because of this. The company determined that its net revenue was negatively impacted roughly $5 million from product returns. The company’s stock quickly fell and rebounded even faster.
Insys had to set aside $150 million regarding the ongoing Department of Justice (DOJ) investigation into the company’s illegal marketing practices for Subsys. Excluding this, the company’s net loss would be bear $15.5 million or $0.21 per share. That’s still worse than what analysts expected, but it’s much closer than the actual reported net loss for the third quarter.
Insys CEO Saeed Motahari that the third quarter decline was more relaxed than prior quarters. Adding that the sales for Subsys in October were higher than September. Although Syndros isn’t producing high revenue yet, Motahari said the results for the of the first two months of sales were in sync with their model.