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Insys Pipeline Remains Source For Long-Term Upside

Insys Pipeline Remains Source For Long-Term Upside

Oppenheimer said in a note on Wednesday Insys Therapeutics Inc (NASDAQ: INSY) maintains its potential long-term upside. However, the firm said it prefers to be on the sidelines for now.

DoJ Investigation Resolution Awaited

Analyst Derek Archila said he continues to rate Insys at Perform, as he awaits clearance of the ongoing DoJ investigation, which he sees as a major overhang.

The investigation pertains to allegations concerning the company bribing doctors to prescribe an extremely addictive opioid painkiller to patents who can do without it. Some of the company's executives, including the then-CEO Michael Babich, were arrested by the FBI regarding this. The analyst believes a settlement may be nearing, going by his recent diligence with a former federal prosecutor.

Challenging Reimbursement Environment To Hit Subsys Sales

Though the analyst feels the stock may rally on the announcement, he sees risk to Subsys sales, which is expected to be impacted by a challenging reimbursement environment and continued volume declines for the overall transmucosal immediate-release fentanyl class.

According to Oppenheimer, the continued vacancy at the permanent CEO role could hinder long-term strategy execution, including unlocking value from the company's high-value cannabidiol pipeline.

Over-Hyped Syndros Sales?

Oppenheimer also believes the consensus sales estimates for Syndros are too high. The firm said it likes Insys' pipeline optionality, particularly in its cannabidiol programs. However, it recommends that investors can still capture meaningful upside with less risk, once the overhangs are resolved.

At last check, shares of Insys were up 7.77 percent at $11.10.


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