Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Insys Therapeutics (INSY), a biopharmaceutical company focused on developing therapies to treat cancer, plunged by as much as 27% after announcing the receipt of a subpoena from the Office of the Inspector General for the Department of Health and Human Services.
So what: According to the press release, the probe revolves around the sales and marketing tactics of Subsys, a sublingual spray designed to treat severe cancer pain. The inspector general has requested documents from Insys to that nature, and Insys has said it will cooperate fully. Insys currently has only two FDA-approved drugs on the market, and in its most recent quarter Subsys made up 97.3% of its $29.2 million in total sales.
Now what: It's pretty easy to see why shareholders are so skittish today with the company's best-selling drug currently being investigated by the HHS. Now keep in mind that sometimes these investigations turn up absolutely nothing or necessitate a slap on the wrist or marketing change. In other instances, they can lead to huge fines, and that's the primary worry for investors here. It's far too early to say which way the pendulum would swing, but this news unfortunately negates what was an incredible third-quarter report last month.
