What happened

Following comments from its new CEO that suggest an end could be in sight for investigations into the improper off-label marketing of Subsys, and ahead of the launch of its new marijuana drug Syndros, shares in Insys Therapeutics (NASDAQ:INSY) soared 31% higher in May, according to S&P Global Market Intelligence.

So what

Insys Therapeutics has been one of the worst-performing marijuana stocks over the past two years. Its share price has been bogged down by tales of improper marketing of its opiate pain-killer Subsys, a fentanyl spray that's highly potent, and that previously had been a big source of sales and profit growth for the company.

A marijuana plant grows in a bed of coins.

IMAGE SOURCE: GETTY IMAGES.

Concerns over Subsys' misuse and, more broadly, push-back against the use of opiates altogether, have created significant uncertainty at the company and big turnover in its executive ranks, and that's taken the focus off of new drug development.

However, better times may be coming. In April, founder John Kapoor stepped down from his temporary role as CEO, clearing the way for ex-Purdue Pharma executive Saeed Motahari to take over the company's reins, and Motahari appears dead-set on getting Insys Therapeutics back on track.

In early May, Motahari hosted his first earnings conference call with investors as Insys' CEO, and as fellow Fool Keith Speights points out, he said he's working with the Justice Department to put the Subsys debacle behind it. Motahari also said the company is on track to launch Syndros, a reformulation of the marijuana drug Marinol, soon, and he reaffirmed the company's commitment to R&D, including the development of marijuana drugs based on marijuana's chemical cannabinoids. Specifically, the company is researching the use of cannabidiol in epilepsy patients, an approach that's been validated by clinical trial success at marijuana drug maker (and Insys Therapeutics competitor) GW Pharmaceuticals.

Motahari summarized the company's plans:

This year, we believe we are poised to grow our commercial portfolio from one to two products, file an NDA for buprenorphine, and significantly advance our pipeline of products across both our sublingual spray and cannabinoid platforms. Our goal is to continue to focus on working toward a resolution in the DOJ investigation, stabilizing Subsys sales, successfully launching Syndros, and advancing our pipeline as we position ourselves for future growth.

Now what

If Motahari can secure a settlement regarding Subsys, and the Syndros launch goes off without a hitch, this stock could have more running room ahead of it. About 44% of the company's share float is held short -- an outsize position that suggests any progress could fuel a short-covering rally that drives prices higher.

However, fixing what's wrong with Insys Therapeutics won't be easy. Subsys sales continue to drop, falling to $36 million from $60 million year over year in the first quarter. A Syndros launch isn't a guaranteed success, either. Syndros got less-favorable DEA scheduling than Marinol, and that could significantly dampen its use. Additionally, there's still no telling what a settlement with the DOJ could look like, or entail.

Nevertheless, finding beaten-down marijuana stocks to buy like this isn't easy, and conceivably, not a lot will need to go right for this company to see its share price increase. Overall, this remains a high-risk bet that's unsuitable for most investors, at least until Motahari proves himself capable of doing what's necessary to kick-start sales.

Todd Campbell has no position in any stocks mentioned. His clients may have positions in the companies mentioned The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.