Insys Therapeutics Archives - Green Market Report

StaffAugust 8, 2018

It’s time for your Daily Hit of cannabis financial news for August 8, 2018:

On The Site

Insys Therapeutics Inc.

Insys Therapeutics Inc. (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.”

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.

Cannabis Lawsuit

There’s something rotten, it seems, in the state of CBD Naturals and its CBD-related claims. When Jared Berry’s brand CBD Naturals was recently selected as the exclusive distributor of a premier hops/humulus CBD isolate in the United States, he may or may not have expected that he would soon be served with a lawsuit.

The lawsuit comes off the heels of a contentious debate about the origin and trademark rights to extracting CBD from hops (the process trademarked humulus kriya), for which credit is to go to Peak Health Center. The process proves to be promising for CBD medicine as it as a derivative of a legal substance, promising consumers access to CBD in states that have laws against hemp or cannabis CBD.

Isodiol International Inc.

Isodiol International Inc. (ISOLD), a manufacturer of pharmaceutical grade CBD and CBD-based products, announced that its subsidiary, Iso-Sport, has entered into an agreement with ALTIS LLC. Based out of Arizona, ALTIS is a company dedicated to promoting Track & Field through multi-disciplinary uniﬁcation of the sport and provides elite athletes a variety of services such as coaching, integrated support services, and education.

In Other News

General Cannabis Corp.

General Cannabis Corp (CANN) announced financial results for the quarter ended June 30, 2018. The company delivered a net of $3.6 million for the quarter a 130% drop from the previous year’s loss of $1.5 million for the same time period. The loss per share was ($0.10) versus last year’s loss of ($0.08). Revenues jumped to $1.1 million from last year’s $833,000.

SinglePoint Inc.

SinglePoint Inc. (SING) reported revenues of over $188,000 for the first quarter of 2018, which represents a significant increase as compared to the first quarter of 2017. This revenue increase has been generated by successful acquisitions continuing to grow and operate, including DIGS and JAG. Acquisitions have been a key factor in starting to build a solid financial base.

Sugarmade, Inc.

Sugarmade, Inc. (SGMD), one of the largest publicly traded cannabis-related hydroponics supply companies returns to the OTCQB Venture Market trading venue as a fully reporting company with the U.S. Securities & Exchange Commission. Additionally, the Company makes comments relative to the strong revenue growth it is experiencing within the cannabis supplies marketplace.

Kush Bottles, Inc.

Kush Bottles, Inc. (KSHB) acquired Summit Innovations in May of 2018, and now, with the launch of Kush Energy, has successfully completed a full integration. Kush Energy will focus on servicing the rapidly growing concentrates category, which in many primary cannabis markets now account for nearly half of all sales. Kush Energy will operate eight hazmat compliant distribution facilities across the country, including a new location in Humboldt County in Northern California. Kush Energy’s core products are high purity butane, propane, iso-butane, ethanol, dry-ice and blends. The new division will also work closely with cannabis manufacturers and extraction facilities to ensure cleanliness, product quality, reliable supply, safety, and compliance during the extraction process.

Bespoke Extracts Inc.

Bespoke Extracts, Inc. (BSPK) has named JOH as the exclusive broker of Bespoke CBD products in the Northeastern Region of the United States. Founded in 1956, JOH (www.johare.com) is a national food broker recognized as one of the strongest brokers in the country with 17 offices and strategic partnerships across the U.S. JOH will market Bespoke Extracts’ line of high quality, hemp-derived CBD products direct to retailers through its Specialty Natural channel.

Debra BorchardtAugust 8, 2018

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.”

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.

Debra BorchardtJuly 30, 2018

It’s time for your Daily Hit of cannabis financial news for July 30, 2018.

On The Site

Scythian Biosciences

Last month Scythian Biosciences agreed to sell its interests and assets in Argentina, Columbia, and Jamaica to Aphria Inc. in a deal valued at $193 million. Now the company is taking that money to enter the Florida Medical Marijuana market in a deal valued at C$136 million.

Scythian signed a letter of intent (LOI) to purchase CannCure Investments Inc, which is an Ontario-based company that is itself in the process of acquiring an interest in the Florida-based 3 Boys Farms, along with The Healthcare Organization. In addition, the deal includes a Florida agricultural company that has a license to operate as a Medical Marijuana Treatment Center in the state. The deal is expected to close on or about October 15, 2018.

Insys Therapeutics

The FDA giveth and the FDA taketh away. On July 27, 2018, Insys Therapeutics (INSY) announced that the U.S. Food and Drug Administration declined to approve the company’s New Drug Application for Subsys, an opioid-based painkiller, on the grounds that it was potentially unsafe.

News of the denial on Friday sent Insys shares sliding by 9% to $6.62. For the last several years, Insys shares have been on the decline, due in large part to the company’s ongoing legal issues.

Organigram

Canadian-based Organigram Holdings Inc. (OGRMF) stock rose over 2% to approximately $3.43 after the cannabis delivered solid results for its fiscal third quarter. The company reported sales of C$3.7 million for the fiscal third quarter versus last year’s C$1.9 million in the same time period. The company also reported net income of C$2.8 million for a sequential increase of 162% compared to $1.1 million in the second quarter. This easily topped last year’s third-quarter loss of $C2.3 million.

In Other News

Phivida Holdings

Phivida Holdings Inc. (PHVAF) won the approval of its Form 211 by FINRA, and the approval to graduate on to the OCTQX Best Market as a foreign issuer, with full DTC eligibility now in process. The Company’s common shares are scheduled to commence trading on the OTCQX under the symbol “PHVAF” effective July 30^th, 2018.

Village Farms International, Inc.

Village Farms International, Inc. (VFFIF) and Emerald Health Therapeutics, Inc. (EMHTF) announced that their 50/50 joint venture for large-scale, low-cost, high-quality cannabis production, Pure Sunfarms, has received its cannabis sales license from Health Canada. Pure Sunfarms is now permitted to immediately begin selling product from its expanding inventory of high-quality dried cannabis, including to Emerald Health Therapeutics, under their previously announced supply agreement, as well as to address significant demand from other licensed producers. This sales license also positions Pure Sunfarms to secure supply agreements with provincial government distributors for the imminent legal adult-use marketplace.

William SumnerJuly 30, 2018

News of the denial on Friday sent Insys shares sliding by 9% to $6.62. For the last several years, Insys shares have been on the decline, due in large part to the company’s ongoing legal issues.

In 2016, seven Insys executives were arrested for conspiring to bride medical staff in several states to prescribe medication. Then, last year, INSYS founder John Kapoor was arrested in Arizona and charged with RICO conspiracy, conspiracy to commit wire fraud, and conspiracy to violate the Anti-Kickback Law for his efforts to secure prescriptions of Subsys.

Additionally, the company was sued earlier this year by the state of New York for deceptively promoting Subsys. Specifically, the state claimed that the company was engaging in a pattern of deceptive behavior by downplaying the risks of addiction by using Subsys, lying to healthcare providers to bypass the authorization process, and for bribing doctors to prescribe the medication. The suit is still ongoing.

Considering these legal issues, and the fact that an advisory committee in May recommended against approving the drug, it is less than surprising that the FDA denied approval to Subsys. In a statement, Insys senior vice president of regulatory affairs, Steve Sherman, tried to put on a good face in light of the potentially devasting news.

“Given the attributes of our proprietary buprenorphine formulation for sublingual delivery, we continue to believe that this drug-device combination could bring value to the management of pain and will assess the next steps in the context of the company’s overall mission,” said Sherman

Despite the disappointing news for investors, there are still at least three analysts that give Insys a Buy Rating, according to NASDAQ. Even after the company gets poor news on its drugs, investors seem to keep giving the company the benefit of the doubt. The stock tumbled in the summer of 2017 when its drug study didn’t go as planned and continued to fall until Insys executives kept talking up its pipeline giving some investors hope for a turnaround.

William SumnerFebruary 27, 2018

epidiolex-cannabidiol-or-cbd-bottle-and-packaging-1280x853.jpg

GW Pharmaceuticals plc (GWPH), a biopharmaceutical company dedicated to developing cannabis-based pharmaceuticals, announced today cannabidiol (CBD) has been granted orphan drug status by the European Medicines Agency (EMA) for the treatment of tuberous sclerosis (TS).

Orphan drug designation by the EMA is meant for medicines used to treat rare diseases, as defined by no more than 5 patients in 10,000. The designation allows companies to profit from incentives offered by the European Union to develop medicines for the treatment of life threatening or debilitating rare diseases; including reduced fees and protection from competition once on the market.

Currently the company is recruiting for a Phase 3 clinical trial of Epidiolex, a cannabidiol-based medicine, as an ancillary treatment to TS. The company expects to begin receiving data by the second half of 2018. Pending positive results, the company expects to submit regulatory applications for Epidiolex in the treatment of TS in both the United States and European Union.

“GW‘s decision to evaluate Epidiolex in patients with tuberous sclerosis is based on findings from the physician-led Epidiolex expanded access program where the results of this open-label use of Epidiolex in children with TS have been very encouraging,” said GW CEO, Justin Gover, in a statement.

This latest comes on the heels of news that the company’s pipeline compound GWP42006 failed its Phase 2a proof of concept study. The drug was meant as an ancillary treatment for adults with inadequately controlled focal seizures but recent studies showed a much higher response from patients taking placebos than expected.

In related news, GW competitor Insys Therapeutics (INSY) suffered a setback after news broke that Gavin Awerbuch, a Michigan doctor tied to a federal investigation into the company, was sentenced to 32 months in prison after admitting to writing illegitimate prescriptions for Insys’ fentanyl-based drug Subsys and health care fraud.

According to Reuters, the company used a fraudulent speaker program to pay the doctor $138,435 in kickbacks. In addition to severing 32 months in prison, Awerbuch must oay $4.1 million in restitution and fines.

William SumnerFebruary 2, 2018

INSYS Therapeutics, Inc. (INSY), a manufacturer of pharmaceutical cannabinoids and spray technology, has once again found itself in legal hot water.

On Feb. 1, 2018, New York Attorney General Eric Schneiderman filed a lawsuit against the company, alleging that INSYS deceptively promoted its fentanyl-based cancer pain medicine, Subsys. Seeking $75 million in penalties, Schneiderman claims that the company marketed Subsys for purposes other than what was approved by the U.S. Food and Drug Administration.

“At a time when the opioid epidemic was ravaging New York, Insys Therapeutics allegedly marketed a drug illegally by blatantly disregarding the grave risks of addiction and death that opioids pose,” said Schneiderman in a statement. “As we allege, Insys showed a wanton disregard for the law and the lives of New Yorkers and we will hold them accountable.

Additionally, Schneiderman alleges that INSYS engaged in a pattern of deceptive and illegal conduct by downplaying the risks of addiction, lying to healthcare providers to bypass the authorization process, and bribing doctors to prescribe the medication.

This is not the first time that INSYS has found itself in the crosshairs of law enforcement officials. In 2016, seven former executives with the company were arrested for conspiring to bribe medical staff in several states to prescribe medication.

A year later, INSYS was sued by Arizona Attorney General Mark Brnovich for misleading doctors and patients about Subsys. Later that same year, INSYS founder John Kapoor was arrested in Arizona and charged with RICO conspiracy, conspiracy to commit wire fraud, and conspiracy to violate the Anti-Kickback Law for their efforts to secure prescriptions of Subsys.

Although INSYS executives have pleaded not guilty, the company is currently in talks with the U.S. Justice Department and estimates that it may have to pay at least $150 million in fines and penalties. Previously, INSYS has agreed to pay $9.45 million to conclude investigations in Oregon.

In response to Schneiderman’s lawsuit, INSYS defends its actions and points to the fact that prescriptions of Subsys made up a very small percentage of opioid prescriptions in New York. When the drug launched in 2012, Subsys accounts for less than 0.02% of opioid prescriptions.

Similarly in 2015, the year of highest use for Subsys, 9,200 patients were prescribed Subsys compared to the approximately 52 million patients in the United States prescribed opioids. As such, INSYS denies its role in creating the opioid crisis in New York, although it does specifically address the claims made by Schneiderman.

Debra BorchardtDecember 6, 2017

Zynerba Pharmaceuticals Inc. (ZYNE) stock tumbled 10% on Wednesday following a roller coaster ride on the share price after the company reported new clinical data. Zynerba announced that its data from the Phase 2 trial of its STAR 1 drug for epilepsy resulted in a meaningful reduction in seizures.

The 18-month open-label study of the ZYN002 cannabidiol transdermal gel found that patients who received 195 mg dose for six months saw their seizures reduced by 65%. Patients that got a 390 mg dose for three months in the Phase 1 trial and six months in the phase two trial experienced a 48% drop in seizures versus the baseline.

Zynerba Stock’s Volatile Ride

The stock jumped from $13.48 on Monday morning to a high of $15.14 before closing at $13.37. It closed even lower on Tuesday at $13.01 and has slipped to $11.22 on Wednesday. Canaccord Genuity raised its price target on Zynerba to $18.00 from its previous target price of $15 and kept the buy rating. The analyst Arlinda Lee cited the study results as a reason for increasing the price target.

“These new ZYN002 data are the first of their kind, showing that focal seizures in adults may be effectively treated by a transdermal gel delivery of pharmaceutically produced cannabidiol,” said Terri Browning Sebree, Zynerba’s president. “In this population of patients, continued treatment with ZYN002 was shown to significantly reduce seizure rates compared to baseline. Importantly, baseline seizure frequency appears to be an important indicator of response.”

Insys Therapeutics Slides

Insys Therapeutics (INSY) also slipped in trading by 2% to $5.23 even as the company announced that its New Drug Application (NDA) for buprenorphine as a sublingual spray for pain relief had been accepted for filing by the FDA (Food & Drug Administration). According to the company statement, the FDA set July 28 as the date to complete its review. Insys also plans to include data from a seven-day study with 100 patients to augment the NDA package.

“We look forward to working with the FDA in 2018 to add our buprenorphine sublingual spray to the range of treatment options available to physicians whose patients suffer from moderate-to-severe acute pain,” said Steve Sherman, senior vice president of regulatory affairs at INSYS. “We believe that this novel formulation and delivery method of buprenorphine holds great promise as an alternative to traditional opioids.”

Insys has struggled this year to overcome scandals regarding past executives and the company’s founder. The stock has plunged from a 52-week high of $15.02 to a year’s low of $4.10 and was lately trading at $5.23.

In Sympathy With GW?

Traders believe the stocks were sliding in sympathy with GW Pharmaceuticals (GWPH), which was tumbling 6% in trading on Wednesday. The stock had fallen after the company announced that it was offering more shares.

Debra BorchardtNovember 2, 2017

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.

Debra BorchardtOctober 30, 2017

Insys Therapeutics (INSY), once an up and coming cannabis biotech company has gone down in a blaze of scandal. The company’s stock stopped trading last week when former executives were arrested (again).

Insys Therapeutics says it has addressed the issues that caused the NASDAQ exchanged to place a hold on the trading of its stock and is waiting to hear from the exchange as to whether it will begin trading again. The stock last traded at $5.74, down from its 52-week high of $15.06. In 2015, the stock hit a high of $44, but persistent negative headlines have caused the stock to crash. Revenues have plunged and earnings are in the negative territory.

On October 26, former Chief Executive Officer and founder John Kapoor was arrested and charged with RICO conspiracy, conspiracy to commit mail fraud and conspiracy to violate the Anti-kickback law for the company’s promotion of its fentanyl drug Subsys. Other former executives that were arrested included the former CEO and President Michael Babich and several in the sales department including:

Former Vice President of Sales – Alec Burlakoff
Former Director of Sales – Richard Simon
Former Vice President of Managed Markets – Michael Gurry
Former Sales Representatives – Sunrise Lee, Joseph Rowan

The company had been accused as early as December of 2016 for bribing medical practitioners to write prescriptions for Subsys and also misleading insurance companies in order to get coverage for non-cancer patients in an off-label use. Several of these same players were arrested back then, but these charges are above and beyond what happened last December.

The company insists that all the bad players are gone and it is trying to move forward. However, even after all the charges from last December, Kapoor remained on the board of directors and only resigned on October 29^th. “I am confident that I have committed no crimes and believe I will be fully vindicated after trial,” Kapoor said in a statement on Sunday.

The company has also set aside $150 million according to a September filing for liability payments that it could be forced to make over the next five years. In a company statement, Insys Therapeutics said, “This estimate reflects a minimum exposure at which management has determined a willingness to settle these matters. The DOJ has not accepted management’s offer, and there can be no assurance that future discussions with the government to resolve these matters will be successful, that the approvals we need will be obtained or that any potential settlement will be agreed to on terms and conditions acceptable to us or the DOJ.”

Even if the company’s stock begins trading again, it will be a difficult road back. The current executives have shown poor judgment in allowing the founder to remain on the board during these charges. In addition to that, it’s main drug is still fentanyl, which is closely associated with the opioid epidemic. Its cannabis-related drug Syndros, which is a dronabinol was only just launched this past summer. In addition to that, the company is facing numerous lawsuits ranging from patent issues regarding Syndros to a case filed by former board members.

It’s a messy situation that investors should use extreme caution when considering an investment.

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Insys Therapeutics Archives - Green Market Report

The Daily Hit: August 8, 2018

On The Site

In Other News

Insys Therapeutics Misses Earnings, Revenue Estimates As Stock Falls In After Hours Trading

The Daily Hit: July 30, 2018

FDA Rejects Insys Therapeutics’ New Drug Application

GW Pharmaceuticals Granted Orphan Drug Status By European Agency

New York Attorney General Sues INSYS Therapeutics For Deceptive, Illegal Practices

Zynerba, Insys Therapeutics Both Slide In Trading

Zynerba Stock’s Volatile Ride

Insys Therapeutics Slides

In Sympathy With GW?

Insys Therapeutics Delivers Third Quarter Earnings Amid Bribery Scandal

Insys Therapeutics Goes Down In A Blaze Of Scandal

Goodness Growth Earnings Benefit from Arizona Exit, Minnesota Market Changes

Kentucky Becomes 38th State to Legalize Medical Marijuana

Clever Leaves Ekes Past Expectations, Losses Rise

On The Site

In Other News

Zynerba Stock’s Volatile Ride

Insys Therapeutics Slides

In Sympathy With GW?

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