Source: Insys Therapeutics

Enthusiastic investors sent Insys Therapeutics' (INSY) shares up 20.5% last month after the company reported that it had refiled its FDA application for approval of liquid dronabinol, a treatment for chemotherapy-induced nausea and anorexia in AIDS patients.

Reformulating success
Insys Therapeutics' liquid dronabinol is a new formulation of the long-standing cancer and HIV therapy, Marinol. Insys Therapeutics believes that, if approved, its variation can capture a significant slice of this $150 million market.

Insys Therapeutics had originally filed for FDA approval of oral dronabinol, which is derived from the marijuana cannabinoid THC, last fall. However, the FDA kicked the application back to Insys Therapeutics citing a need for more insight into the drug's use in children.

Because Insys Therapeutics has resubmitted its filing with the FDA, it would appear that they've been able to resolve the FDA's concerns. If so, then the FDA could issue a decision on whether to approve oral dronabinol early next year.

Looking ahead
Investors looking for some evidence that Insys Therapeutics can deliver on its belief that it can win Marinol market share can look no further than the success the company has had marketing Subsys, its formulation of the widely used pain medication fentanyl. Since launching Subsys in 2012, Insys Therapeutics has seen its Subsys sales increase dramatically. In the first quarter alone, sales of Subsys jumped 29.8%, to $70.5 million.

Investors may also want to consider the fact that Insys Therapeutics' management team has, to date, been very shareholder friendly. The company is led by a former venture capital partner, and despite spending increasingly more on research, Insys Therapeutics remains debt free with $124 million in cash on the balance sheet, up $18 million from December.

Finally, investors may also find Insys Therapeutics' other ongoing research programs intriguing because they could potentially further drive sales growth. Those programs include research into a new formulation of the cancer drug paclitaxel, the active ingredient in the top-selling therapies Taxol and Abraxane, and the development of marijuana-derived therapies for epilepsy.