Insys Therapeutics Inc (NASDAQ: INSY) is having an incredibly strong start to the trading session this morning. However, if you’re digging for news, the truth of the matter is that you’re not going find any. Nonetheless, there is a good reason for the run. Today, we’ll talk about:
- Why the stock is headed up;
- what we’re seeing from INSY in the market today; and
- what we’ll be watching for ahead.
Why INSY Is Climbing
As mentioned above, Insys is having an incredibly strong start to the trading session this morning, but there hasn’t been any news. No press releases have been issued nor SEC filings filed. So, what’s the deal?
In short, the gains that are happening today are likely the result of a continued pot stock rebound. INSY is a company that creates targeted therapeutics through the use of chemicals found in the cannabis plant. However, this is where things get interesting.
When it comes to companies like Aurora Cannabis, Cronos, Tilray, and New Age Beverages, the industry is ripe for good news. Earnings are coming and the recreational market in Canada is going to be the center of focus. The CBD market is also opening up in the United States, creating opportunity.
Unfortunately however, INSY isn’t necessarily a beneficiary of all of this news, and really isn’t all that of a great pick. Here’s why:
- Legalization Is Bad For Insys – First and foremost, the world is starting to shift toward global legalization of cannabis. This would be bad news for INSY as the company is focused on creating cannabis-related therapeutics, in particular, for pain. That’s all fine and dandy, but if cannabis were legal and your doctor prescribed you an over-priced medication derived from cannabis to treat pain, what would you do? Chances are that you would go to the store and buy pot at a lower price. In fact, this is precicely why INSY donated half a million dollars to try and stop the legalization of cannabis!
- Marketing And Sales – There’s quite a bit of debate surrounding the marketing and sales tactics used by the company for Subsys, a treatment that is FDA approved. The company is littered with accusations of bribery and more with regard to the sales and marketing of Subsys.
- Buprenorphine – The FDA recently rejected Buprenorphine, citing safety issues. The concern here is that INSY could be a one trick pony and with so much chatter around the wrong-doing by the company with regard to the sales of the drug, that’s not a good thing!
What We’re Seeing From The Stock
Regardless of the risks, investors and traders alike are loving Insys today. The stock has been climbing since the pre-market. As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:16), INSY is trading at $4.80 per share after a gain of $0.83 per share or 20.91% thus far today.
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What We’ll Be Watching For Ahead
Moving foward, the CNA Finance team will continue to follow INSY closely. In particular, we’re interested in how high the stock goes as pot stocks across the board seem to be rebounding. Unfortunately however, we’re expecting this to end in a large decline from current levels, given the various reasons to be concerned mentioned above. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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