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What happened?

Less than a year after reassuming the reins following the exit of embattled CEO Michael Babich, Insys Therapeutics (NASDAQ:INSY) founder and principal investor John Kapoor has decided to leave the company to pursue "other interests."

The revolving door at the top of this pain-drug maker has done little to boost investor confidence. The company's shares fell 17.9% in September, and they're down 54% since September 2015. 

So what?

Babich was shown the door last November following a CNBC report on a wide-ranging investigation into the sales and marketing practices used by Insys Therapeutics to drive demand higher for its opioid spray Subsys.

Subsys, which is only approved for use in breakthrough cancer pain, quickly became the most prescribed transmucosal immediate release fentanyl available. Fentanyl is roughly 100 times more powerful than morphine, and Subsys sales exited 2015 at a $360 million annualized clip.

According to investigators, Insys Therapeutics improperly marketed Subsys for use in pain indications other than breakthrough cancer pain. For example, doctors were paid to speak at dinners at which they never had to speak, and reportedly, kickbacks were given to doctors in exchange for prescription volume.

The company settled with the State of Oregon last year for $1.1 million; however, other states continue to investigate the company's practices, more settlements could be coming, and the company continues to clean house.

In August, EVP and Chief Operating Officer Dan Brennan left the company, and on September 21, CEO Kapoor announced that he'll be leaving as soon as a successor is found. Kapoor's departure announcement came only shortly before news broke on Oct. 3 that an illegal kickback scheme resulted in the recent arrest of former Insys district sales manager Jeffery Perlman, who left Insys last December.

Now what?

Growing concern over opioid abuse has caused Subsys sales to drop significantly this year. Subsys sales fell to about $67 million in Q2 from roughly $78 million in Q2, 2015. 

The company hopes the FDA's approval of its oral version of the marijuana-based drug marinol in July can offset some of Subsys' sales decline. Syndros is a liquid formulation of a THC drug that's used to treat anorexia in AIDS patients and chemotherapy-induced nausea and vomiting in cancer patients. 

Insys Therapeutics is also evaluating the use of its spray technology to deliver other high-value medicines. In August, management reported that a phase 3 study evaluating buprenorphine sublingual spray for moderate-to-severe postoperative pain in patients undergoing bunionectomy was successful. The company plans to discuss the results with the FDA by the end of this year.

Additionally, Insys Therapeutics is developing CBD-based marijuana drugs that may reduce seizures in patients suffering from rare forms of epilepsy. The company's lead CBD program involves children who are diagnosed with infantile spasms.

Overall, the question marks associated with this company justify investors' skittishness. Perhaps Kapoor's departure and new drugs like Syndros can get this company back on its feet, but until then, this stock should be considered very risky. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.