What happened

Investors worried sinking opioid sales haven't found a bottom yet pushed Insys Therapeutics Inc. (INSY) stock 17.1% lower in March, according to data from S&P Global Market Intelligence. Sales of the pain relief specialist's cannabis-based products weren't nearly strong enough to begin offsetting heavy Subsys losses.

So what 

Insys Therapeutics announced annual sales fell 42% in 2017, and a 43% year-to-year drop in the fourth quarter suggests falling Subsys sales haven't come close to bottoming out yet. Subsys is approved for the treatment of breakthrough cancer pain, but it's been suggested that up to 80% of Subsys sales in past years were the result of off-label prescriptions. 

Upset person holding a downward sloping stock chart.

Image source: Getty Images.

Also last month, President Trump said he was considering suing drugmakers for their role in fueling the opioid epidemic. The company set aside $150 million for legal issues last year, but those funds are associated with an ongoing Department of Justice investigation, not a new federal lawsuit.

Now what

Insys claims it secured some managed care contracts that will help "stabilize" tanking Subsys sales. Combined with the continued rollout of a new drug, management thinks it can stop the top line from contracting further this year. 

Insys launched Syndros, a sublingual spray containing marijuana's main psychoactive ingredient last summer and it generated around $1.4 million in revenue by the end of 2017. Syndros is approved for treatment of chemotherapy-induced nausea and vomiting, plus anorexia associated with AIDS. While it's off to a solid start in this indication, it's important to remember the same active ingredient has been available as a capsule since 1985.

Insys finished 2017 with a $164 million cash balance after losing $47 million last year. If Syndros sales don't start rocketing higher, Insys could find itself strapped for cash before the current year is through.