INSYS Therapeutics (INSY) Decline Appers Overdone - Wells Fargo

Wells Fargo maintained an Outperform rating on INSYS Therapeutics (NASDAQ: INSY) with a price target of $58-$60. Shares declined on reports of doctor fraud in Michigan. Analyst Michael Faerm believes the decline is overdone.

"This investigation is a negative for INSY, in terms of potential loss of future Rx volumes from Dr. Awerbuch’s Rx base, and also from the possible influence of the investigation headlines on the future Rx-writing habits of other physicians. Disclosure by INSY of Dr. Awerbuch’s total Rx volumes (including non-Medicare) would help to dimension the former; and further disclosure of Subsys Rx concentration by the company would help to better dimension the latter risk. We would not be surprised to see further declines in the stock upon Monday’s open, given that Friday’s declines largely occurred in the last hour of the day and accelerated, indicating that the market’s awareness of the investigation was growing. But based on what is known thus far, we believe that the modest sales contribution of the prescriptions written by Dr. Awerbuch (3.9% from April 2012 to Feb. 2014, and less than 2% in 2014 YTD) mitigates the risk of losses of future prescription volumes, and that in this light Friday’s stock reaction appears overdone," said Faerm.

For an analyst ratings summary and ratings history on INSYS Therapeutics click here. For more ratings news on INSYS Therapeutics click here.

Shares of INSYS Therapeutics closed at $32.68 yesterday.

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