After naming former Purdue Pharma chief commercial officer Saeed Motahari as CEO and reporting 2016 earnings, shares in Insys Therapeutics' (NASDAQ:INSY) increased 7% in April, according to S&P Global Market Intelligence.
The C-suite has been in flux since former CEO Michael Babich resigned in 2015 following allegations of improper marketing of Insys Therapeutics' fentanyl spray, Subsys.
Since Babich's departure, the top spot has been filled by founder John Kapoor, who stepped down earlier this year, and most recently, Santosh Vetticaden, the company's chief medical officer, who resigned last month after Motahari's appointment.
Perhaps new leadership can get Insys Therapeutics on track. Subsys sales have been declining for more than a year, and the company's launch of marijuana drug Syndros has taken longer than investors had hoped following its FDA approval last summer.
Last year, lower Subsys sales caused revenue to fall 27% to $242.3 million from $330.3 million in 2015, and since the drop-off wasn't offset by spending cuts, adjusted net income declined to $0.38 from $1.39 in 2015.
Motahari has his work cut out for him. In April, management said Subsys prescriptions would fall 32% quarter over quarter in the first quarter, and that decline could cause a "commensurate impact on net revenue for the first quarter of 2017."
In addition to stopping Subsys' slide, Motahari will be in charge of executing on Syndros' commercialization. Syndros is a liquid formulation of long-standing THC-based drug Marinol, which is used to prevent nausea and vomiting in chemotherapy patients and to boost appetite in AIDS patients. Previously, Insys Therapeutics pegged Syndros' market opportunity at $200 million annually.
Tapping into that market opportunity might not be easy. In March, the DEA decided Syndros is a Schedule II drug, and that means prescribing it won't be as easy as prescribing Marinol, a Schedule III drug. Schedule II drugs require a doctor's physical signature on prescriptions, prescriptions can't be faxed to pharmacies, and prescriptions for them can't be as easily refilled as prescriptions for Schedule III drugs.