When it rains it pours, and for Insys Therapeutics, the rain seemingly never stops. On March 8, 2018, Insys released its financial report for the fourth quarter, and the full year ending on Dec. 31, 2017, and the results were less than stellar.
The company reported a quarterly net loss of approximately $47 million, or $0.65 per share, compared to the previous years loss of $3.7 million, or $0.05 cents per share. Adjusted EBITDA loss for the fourth quarter was $11.5 million, compared to the previous year’s Adjusted EBITDA of $6.1 million.
In response to the company’s rough financials, Piper Jaffray has downgraded Insys from Neutral to Underweight, with a price target of $4.00 and a 48% downside risk.
This is just the latest in a string of bad news for the beleaguered pharmaceutical company, which has been embroiled in scandal over the last several years due to unethical marketing practices related to its flagship product Subsys.
Most recently, the company was sued by New York Attorney General Eric Schneiderman over what he characterized as a pattern of deceptive and illegal conduct; including downplaying the risk of addiction, lying to healthcare providers, and bribing doctors to prescribe Subsys.
One such doctor, Gavin Awerbuch, was recently sentenced to 32 months in prison for participating in a fraudulent speaker program which paid him $138,435 in kickbacks. In addition to serving 32 months in prison, Awerbuch must pay $4.1 million in restitution and fines.
According to analyst David Amsellem, the company’s weak fourth quarter was largely due to a decline in sales of Subsys and this sentiment was largely echoed by Insys CEO Saeed Motahari.
“People are still reluctant to use this product even for appropriate patients that FDA has approved it,” Motahari said on a conference call, detailing the company’s earnings.
At the opening bell markets reacted strongly to the company’s weak financial report, with shares of Insys dropping off nearly 8% within the first few hours of trading.