Why Insys Therapeutics, Inc. Shares Skyrocketed

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

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 (NASDAQ: INSY  ) , a biopharmaceutical company focused on developing therapies for cancer-supportive care, rocketed higher by as much as 27% after reporting much better-than-expected fourth-quarter results.

So what: For the quarter, Insys delivered $40.2 million in revenue, a 673% increase over the year-ago quarter, as Subsys, the company's FDA-approved treatment for breakthrough cancer pain, saw its revenue climb to $39.2 million. This alone was a 38% increase over the sequential third quarter. Adjusted profit rose to $0.71 per share relative to a $0.59-per-share loss in the corresponding quarter in 2012. By comparison, Wall Street had expected just $34.7 million in revenue and $0.55 in EPS, so Insys absolutely crushed estimates. The company's press release also notes that it plans to file for at least one new drug application and four investigational new drug applications in 2014.

Now what: At the moment, the correlation is pretty clear: Insys' success is wholly dependent on the rapid growth and acceptance of its cancer pain med Subsys. It's difficult to ignore 38% quarterly sequential growth, but with Insys' share price up more than 650% from its 52-week low, it could also give investors reason for pause as well. I would suggest, even at 44 times forward earnings, that Insys could still have further upside given its gross margin, which is nearing 90%, its growing pipeline, and the fact that the Street appears to have underestimated Subsys' peak potential. I wouldn't go so far as to suggest it has another 650% run up its sleeve, but I could see shares moving modestly higher over the next couple of years on Subsys' growth as well as the advancement of key pipeline therapies.

Insys may be up huge over the past year, but even it may struggle to keep up with this top stock moving forward
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2863173, ~/Articles/ArticleHandler.aspx, 8/27/2015 10:47:24 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Sean Williams

A Fool since 2010, and a graduate from UC San Diego with a B.A. in Economics, Sean specializes in the healthcare sector and in investment planning topics. You'll usually find him writing about Obamacare, marijuana, developing drugs, diagnostics, and medical devices, Social Security, taxes, or any number of other macroeconomic issues.

Today's Market

updated 1 hour ago Sponsored by:
DOW 16,654.77 369.26 2.27%
S&P 500 1,987.66 47.15 2.43%
NASD 4,812.71 115.17 2.45%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/27/2015 4:00 PM
INSY $33.25 Up +0.41 +1.25%