Janney: Cannabis, Naloxone, Adrenaline The Perfect Mix For Insys

With a blooming cannabis portfolio, an EpiPen alternative and a potent solution to opioid overdoses, Insys Therapeutics Inc INSY is claiming space in some of biotech’s hottest segments. Some on the Street see “significant upside potential.”

The Rating

Janney analyst Yun Zhong maintained a Buy rating on Insys with an $11 price target.

The Thesis

Janney anticipates three catalysts for 2019: 

◘ March data from a juvenile nonclinical toxicity study on intranasal naloxone will support a New Drug Application submission by the end of the first quarter, Zhong said in a Thursday note.

As the Food and Drug Administration prioritizes increased naloxone access, Zhong expects strong demand for the product, which proves a superior alternative to currently marketed overdose solutions.

“Although based on the discussions at the FDA AdCom and the voting results afterwards, we do not expect the FDA to recommend co-prescribing in all patients who are receiving opioid treatment, we believe naloxone prescription in high-risk populations should increase." 

◘ Insys plans an NDA submission for its intranasal epinephrine by the fourth quarter. The product is slated to launch into a high-demand market with short supply.

“We see a prime opportunity for Insys' non-invasive product, which could have a longer shelf life, to take market share upon FDA approval,” Zhong said, noting a pharmacokinetic profile similar to those of the EpiPen and Adrenalin injections.

◘The firm’s cannabinoid pipeline awaits multiple milestones. Insys expects data from two Phase 2 trials in the first and fourth quarter, and it may secure approval to initiate an autism study during the year. It is also preparing Investigational New Drug applications for treatment of psychosis and anorexia-related anxiety.

“We do not believe investors have attributed much valuation to the CBD pipeline but positive data from the above studies could bring significant changes to investor sentiment,” Zhong said. 

Price Action

Insys shares were down 5.58 percent at $4.40 at the close Friday. 

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