Insys—the pharmaceutical company investigated for its unethical fentanyl marketing tactics in the midst of the opioid crisis—has been planning to move into the cannabis industry for years. In 2016 it funded opposition to cannabis legalization in Arizona to the tune of $500,000, in a blatant move to protect its prospective market for pharmaceutical cannabis products. But now, Insys has stated its intention to get rid of its opioid products, which may turn it entirely into a cannabis company.
The company announced November 5 that it’s looking to sell its opioid-related assets—like Subsys, an under-the-tongue fentanyl spray which generated millions for company at the height of the opioid crisis but has not hit target revenue of late.
President and CEO Saeed Motahari said that the waning market for fentanyl delivery systems, which are prone to misuse, has negatively impacted Subsys sales in the context of the overdose crisis. Asked who would buy the company’s opioid assets, he said they would appeal to oncology companies.
Motahari took over after former executives and managers of Insys were arrested and indicted last year. A federal investigation revealed a kickback scheme for doctors who prescribed Subsys. The executives have pleaded not guilty.
The company’s third-quarter results show a plunge in revenue—from $30 million for the same quarter last year to $18 million—alongside a third-quarter net loss of $30.6 million. Last year’s third quarter saw a net loss of $166.3 million, however—including the small matter of roughly $150 million set aside to make the Department of Justice’s investigation go away through a settlement.
These negative financial outcomes, Motahari announced, require “transforming INSYS into a leader in pharmaceutical cannabinoids and spray technology.”
In spite of the announcement of the shift in strategy, Insys will maintain the activity of Subsys until a sale. But now they’ll be focusing on international markets. Insys has reached an exclusive deal with Dubai-based company Lunatas to commercialize Subsys in the Middle East.