On April 3, 2017 Insys Therapeutics, Inc. (NASDAQ:INSY) ("Insys" or "the Company") reported financial results for the three- and twelve-month periods ended December 31, 2016 (Press release, Insys Therapeutics, APR 3, 2017, View Source;p=RssLanding&cat=news&id=2259151 [SID1234518439]).
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Highlights of and subsequent to the fourth quarter of 2016 include:
Total net revenue decreased to $54.9 million, compared to $93.9 million for the fourth quarter of 2015;
Net loss was $3.7 million, or $(0.05) per basic and diluted share, compared to net income of $18.1 million, or $0.25 per basic and $0.24 diluted share, for the fourth quarter of 2015;
Cash, cash equivalents and investments were $236.7 million as of December 31, 2016;
Announced that the Company is providing for the use of Cannabidiol Oral Solution at doses up to 40 mg/kg/day in compassionate use studies in subjects with refractory pediatric epilepsy following completion of 48 weeks of treatment in the ongoing long-term safety study;
Targeting an NDA filing by end-2017 for Buprenorphine Sublingual Spray for the treatment of moderate to severe acute pain;
The DEA issued an interim final rule that would result in Syndros (dronabinol oral solution) being placed in Schedule II of the Controlled Substances Act;
Saeed Motahari will become President and Chief Executive Officer and be appointed to the Board of Directors, effective April 17, 2017; and
For the first quarter of 2017, the Company experienced an approximate 32% decline in Subsys scripts as compared the fourth quarter of 2016. As a result, Insys anticipates a commensurate impact on net revenue for the first quarter of 2017.
"During 2016 we continued to make progress in our product pipeline across both our sublingual and cannabidiol platforms, and expect to advance our pipeline candidates in 2017. With recent clarity on the scheduling of Syndros, we are targeting a launch in the second half of 2017 and believe the differentiating attributes of this product will provide an important new treatment option for prescribers and patients," said Dr. Santosh Vetticaden, Interim Chief Executive Officer, and Chief Medical Officer of Insys.
Fourth Quarter 2016 Financial Results
Net revenue for the fourth quarter of 2016 was $54.9 million compared to $93.9 million for the fourth quarter of 2015.
Gross margin was 82% for the fourth quarter of 2016 compared with 93% for the fourth quarter of 2015, which was impacted by a $5.8 million charge for excess and obsolete inventory.
Sales and marketing expense was $13.5 million during the fourth quarter of 2016, or 25% of net revenue, compared to $18.5 million, or 20% of net revenue, for the fourth quarter of 2015.
Research and development expense decreased to $15.5 million for the fourth quarter of 2016, compared to $16.1 million for the fourth quarter of 2015.
General and administrative expense decreased to $15.8 million for the fourth quarter of 2016, compared to $21.8 million for the fourth quarter of 2015. Insys recorded a $3.9 million charge related to litigation award and government settlements during the fourth quarter of 2016.
Income tax expense was $0.3 million for the fourth quarter of 2016.
Net loss for the fourth quarter of 2016 was $3.7 million, or $(0.05) per basic and per diluted share, compared to net income of $18.2 million, or $0.25 per basic and $0.24 per diluted share, for the fourth quarter of 2015. Non-GAAP adjusted net income for the fourth quarter of 2016 was $2.1 million, or $0.03 per diluted share, compared to non-GAAP adjusted net income of $32.1 million, or $0.42 per diluted share, in the prior year quarter. The reconciliation of net income to non-GAAP adjusted net income is included at the end of this press release.
2016 Financial Results
Net revenue for the year ended December 31, 2016 was $242.3 million compared to $330.3 million for the year ended December 31, 2015, a decrease of 26.7%.
Gross margin for 2016 was 90%, compared with 91% for 2015.
Sales and marketing expense was $69.7 million during 2016, or 29% of net revenue, compared to $80.7 million, or 25% of net revenue, for 2015.
Research and development expense increased to $73.9 million for 2016, or 31% of net revenue, compared to $56.8 million, or 17% of revenue, for 2015, mainly as a result of Insys’ continued pipeline development investments during 2016.
General and administrative expense decreased to $62.1 million for 2016, or 26% of net revenue, compared to $63.0 million, or 19% of net revenue, for 2015. Insys recorded a $3.9 million charge related to litigation award and government settlements during 2016.
Income tax expense was $0.8 million for 2016.
Net income for 2016 was $7.6 million, or $0.11 per basic and $0.10 per diluted share, compared to net income of $58.1 million, or $0.81 per basic and $0.77 per diluted share, for 2015. Non-GAAP adjusted net income, which adjusts for non-cash stock compensation expense and non-cash income tax expense, was $27.9 million, or $0.38 per diluted share, compared to $105.0 million, or $1.39 per diluted share, in the prior year. The reconciliation of net income to Non-GAAP adjusted net income is included at the end of this press release.
Liquidity
The Company had $236.7 million in cash, cash equivalents, and short-term and long-term investments, no debt, and $269.6 million in stockholders’ equity as of December 31, 2016.