Synthetic Marijuana Producer, Insys Therapeutics, Deserved Trouble

Many marijuana advocates are not interested in any sort of synthetic marijuana, tendencies leaning towards more natural approaches to cannabis use. The few FDA approved forms of cannabis only come in synthetic forms though. The controversial company Insys Therapeutics (NASDAQ:INSY) is the producer of one of them, Syndros.

Syndros may be the only hope for Insys Therapeutics after a very rough 2017. John Kapoor, the CEO and founder of Insys Therapeutics is under scrutiny for allegedly bribing doctors and marketing Subsys, an opioid that has contributed to the opioid crisis facing the country.

It’s this constant battle between rapid growth and federal law that makes marijuana stocks so volatile. But when it comes to volatility, no marijuana stock may have more on the line in 2018 than Insys Therapeutics (NASDAQ:INSY). It’s what I’d call the all-or-nothing marijuana stock for this coming year.

Things could completely fall apart for existing shareholders if the cards don’t fall Insys’ way. In fact, you could argue that they already have, with shares of the company collapsing nearly 90% between the summer of 2015 and the winter of 2017 amid a management scandal.

While there are plenty of issues for Insys currently, they all pretty much point back to Subsys, one of two Food and Drug Administration (FDA)-approved drugs. Subsys is a synthetic opioid containing fentanyl that the FDA approved to treat breakthrough cancer pain. However, it’s been alleged that Insys’ former CEO and founder, John Kapoor, along with numerous members of the company’s management and marketing team, knowingly and willingly marketed Subsys at off-label indications to pump up sales.

In particular, the charges imply that Insys was essentially bribing physicians in the pain-management field to prescribe Subsys in return for “speaking engagement fees,” even if there was no actual speaking being done. These payments were supposedly being made to doctors as a ruse to get insurers to cover Subsys prescriptions.

The company also needs a strong showing from Syndros, its other FDA-approved drug that was launched in August. This oral dronabinol solution (a synthetic form of tetrahydrocannabinol (THC), the psychoactive component of cannabis) is where Insys derives its marijuana-stock ties. Unfortunately, it generated just $0.7 million in sales following its launch in the third quarter.

The stock is a real gamble to investors, however many traders out there are looking for the instruments that have the ability to make a big leap. For trader looking for volatility, Insys Therapeutics is likely to be on their radar. How do you feel about the potential of Insys Therapeutics recovering after its founder, John Kapoor, was accused of greedily contributing to the nation’s opioid crisis?

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Richard Lowe

Richard Lowe is a 14-year veteran of the financial sector with licenses as a commodity broker (Series 3) and investment advisor representative (IAR Series 65). Along with a focus on raising capital for the firms he was employed with, he also wrote and edited much of the content published by them. He holds a BA in Journalism from the University of Massachusetts. He has been a longtime advocate for marijuana legalization due to the social injustices associated with marijuana prohibition and the strong potential for the medicinal benefits of cannabis.

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