INSY Stock Lawsuit in New York State
Insys Therapeutics Inc (NASDAQ:INSY) is staring down the barrel of a state lawsuit in New York, alleging that the company promoted its fentanyl-based drug “Subsys” to the detriment of patients’ health. Insys Therapeutics stock, meanwhile, has fallen by nearly eight percent over the past month.
The suit, which was filed by New York Attorney General Eric Schneiderman on February 1, seeks $75.0 million in penalties. The claim is that Subsys, which is used to treat pain from cancer, was being marketed for purposes that were different from those approved by the U.S. Food and Drug Administration (FDA).
The suit also claims that Insys engaged in illegal behavior by downplaying the risks of addiction, lying to healthcare providers in order to speed along the authorization process, and even bribing doctors to prescribe the medication.
“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. (“New York Attorney General Sues INSYS Therapeutics For Deceptive, Illegal Practices,” Green Market Report, February 2, 2018.)
All in all, it doesn’t look good for Insys, at least on paper. Insys Therapeutics stock is not performing well as a result.
Chart courtesy of StockCharts.com
Analyst ratings for INSY stock have been lowered, with Zacks Investment Research reducing the company’s rating from a “Hold” rating to a “Sell” rating.
The Insys Therapeutics news is not good, no matter how you slice it. The media coverage regarding fentanyl has been extensive over the past year, centered on what is being characterized as a drug epidemic sweeping across the U.S. and many other parts of the developed world.
The role that doctors and pharmaceutical companies have played in the spread of this tragedy has not gone unnoticed.
INSY Stock Forecast
If you’re in the market for a low-cost marijuana stock, I believe that investors can do better than INSY. With a multi-million-dollar lawsuit pending, it’s hard to recommend INSY stock at the moment.
Not to mention, the company may have engaged in illegal and immoral activity, which is hardly something that will endear it to investors.
My INSY stock forecast doesn’t see Insys Therapeutics making significant enough gains to offset the implications of the lawsuit and poor performance we’ve seen from the company as of late.
In my view, there is simply not enough of a justification to be bullish on INSY stock at the moment, despite it being a cheap marijuana stock.
The company is facing a state lawsuit that alleges deplorable, unethical dealings. Should the allegations be proven true, not only will the stock take a hit, the company’s reputation will be soiled. The reputation damage, actually, may have already been done.
In a frothy market with so many options out there, it’s hard to be positive about a company that has not performed particularly well and now faces a damning lawsuit from a state attorney general.