Analyst: Insys To Benefit As FDA Pushes Naloxone Access

As Insys Therapeutics Inc INSY shifts from opioid therapies to cannabinoids and spray technology, one analyst sees an opportunity to buy in.

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The Rating

Janney analyst Yun Zhong assumed coverage with a Buy rating and cut his price target from $16 to $11.

The Thesis

Insys forecasted at least six New Drug Applications through 2022 for products spanning cannabinoids to epinephrine.

The firm specifically stands to profit from heightened naloxone opportunity. Many at the FDA and in the medical community demand increased commercial access to combat the opioid epidemic. Insys has developed a proprietary intranasal spray to reverse overdoses and plans to file its NDA next quarter after completing a requested juvenile toxicity study.

Prospects for co-prescription with medically necessary opioids further bolster the thesis, as does the FDA’s willingness to award high priority status to over-the-counter naloxone developers. The burdensome requisite study design may delay OTC revenue, though.

Apart from naloxone, Insys boasts opportunity in its epinephrine nasal spray, which could address the current EpiPen shortage.

In cannabinoids, its manufacturing scale is empowering studies in diverse indications, from epilepsy and autism to PTSD and Prader-Willi syndrome.

“We believe the data from the cannabidiol (CBD) programs in 2019, if positive, could unlock significant upside potential for INSY shares, which should far exceed the downside risk,” Zhong wrote in a note.

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As another catalyst, Insys is in talks to divest its SubSys, which suffers declining net revenue.

Price Action

At time of publication, Insys shares traded at $4.37.

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