Insys Therapeutics, Inc. 's ( INSY ) shares have been under pressure recently on news regarding prescribing patterns for Subsys. The stock price of the company tumbled 17.41% and 15.45% in the last two consecutive trading sessions.
Why is Insys in the Spotlight?
Insys came into focus after a website, mlive.com, reported that a Michigan-based neurologist, Dr. Gavin Awerbuch, was charged of health care fraud and distribution of controlled substances. The charges sent Insys tumbling as the website stated that according to an affidavit from Marc Heggemeyer, a special agent for the U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations, Awerbuch was responsible for approximately 20.3% of Subsys scrips prescribed to Medicare beneficiaries in the U.S. in the Jan 2009 to Feb 2014 time period.
The Clarifying Statement
In response to this news, Insys issued a clarifying statement. Insys stated that it takes patient safety seriously and works with physicians for the proper prescribing and use of Subsys. The company also said that the transmucosal immediate release fentanyl risk evaluation and mitigation strategy (REMS) access program governs Subsys. The REMS program ensures appropriate use of the drug. Subsys is indicated for breakthrough pain in opioid-tolerant cancer patients.
The company also went on to say that it has broadened its prescriber base so far in 2014, with no single physician writing more than 5% of total Subsys prescriptions.
We note that Subsys is an important product for Insys. It generated 96.5% of the company's total sales in 2013. We believe that any negative development regarding Subsys will impact the company severely. However, the current concerns seem to be temporary.
Insys carries a Zacks Rank #2 (Buy). Some other stocks worth considering include Gilead Sciences Inc. ( GILD ), Affymetrix Inc. ( AFFX ) and Alexion Pharmaceuticals, Inc. ( ALXN ). While Gilead carries a Zacks Rank #1 (Strong Buy), Alexion and Affymetrix hold a Zacks Rank #2.
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