Insys Therapeutics (INSY) 10-Q 6 Aug 15 2015 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 03, 2015
Entity Registrant Name	Insys Therapeutics, Inc.
Entity Central Index Key	1,516,479
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		71,849,606
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Current Period Unaudited) - Scenario, Unspecified [Domain] - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Current Assets:
Cash and cash equivalents	$ 74,035,000	$ 58,106,000
Short-term investments	41,248,000	24,757,000
Accounts receivable, net of allowances of $8,335 and $5,816 at June 30, 2015 and December 31, 2014, respectively	39,150,000	26,544,000
Inventories	35,553,000	34,781,000
Prepaid expenses and other assets	2,493,000	2,243,000
Deferred income tax assets	5,758,000	4,611,000
Total current assets	198,237,000	151,042,000
Property and equipment, net	35,479,000	29,872,000
Long-term investments	29,841,000	23,262,000
Deferred income tax assets	7,967,000	7,602,000
Other assets	3,518,000	3,343,000
Total assets	275,042,000	215,121,000
Current Liabilities:
Accounts payable and accrued expenses	30,626,000	27,454,000
Accrued compensation	8,719,000	6,926,000
Accrued sales allowances	17,599,000	11,296,000
Accrued litigation award	10,356,000	0
Total current liabilities	67,300,000	45,676,000
Uncertain income tax position	3,778,000	3,778,000
Total liabilities	$ 71,078,000	$ 49,454,000
Commitments and contingencies
Stockholders' Equity:
Preferred stock (par value $0.01 per share; 10,000,000 shares authorized; 0 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively)	$ 0	$ 0
Common stock (par value $0.01 per share; 100,000,000 shares authorized; 71,821,175 and 70,702,688 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively)	718,000	707,000
Additional paid in capital	239,003,000	216,061,000
Unrealized loss on available-for-sale securities	(17,000)	(24,000)
Notes receivable from stockholders	(21,000)	(21,000)
Accumulated deficit	(35,719,000)	(51,056,000)
Total stockholders' equity	203,964,000	165,667,000
Total liabilities and stockholders' equity	$ 275,042,000	$ 215,121,000

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Accounts receivable, allowance for doubtful accounts	$ 8,335	$ 5,816
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	71,821,175	70,702,688
Common stock, shares outstanding (in shares)	71,821,175	70,702,688

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Net revenue	$ 77,633,000	$ 55,696,000	$ 148,403,000	$ 97,332,000
Cost of revenue	8,305,000	6,555,000	14,680,000	11,328,000
Gross profit	69,328,000	49,141,000	133,723,000	86,004,000
Operating expenses:
Sales and marketing	21,986,000	14,077,000	42,902,000	25,695,000
Research and development	17,796,000	9,189,000	28,398,000	13,197,000
General and administrative	15,284,000	$ 10,689,000	28,530,000	$ 19,257,000
Charges related to litigation award	2,304,000		10,304,000
Total operating expenses	57,370,000	$ 33,955,000	110,134,000	$ 58,149,000
Operating income	11,958,000	15,186,000	23,589,000	27,855,000
Other income (expense):
Interest income	105,000	$ 26,000	230,000	43,000
Other income (expense), net	30,000		30,000	2,000
Total other income (expense)	135,000	$ 26,000	260,000	45,000
Income before income taxes	12,093,000	15,212,000	23,849,000	27,900,000
Income tax expense	4,779,000	5,747,000	8,512,000	10,777,000
Net income	7,314,000	9,465,000	15,337,000	17,123,000
Unrealized gain on available-for-sale securities	(21,000)	13,000	7,000	(5,000)
Total comprehensive income	$ 7,293,000	$ 9,478,000	$ 15,344,000	$ 17,118,000
Net income per common share:
Basic (in dollars per share)	$ 0.10	$ 0.14	$ 0.22	$ 0.25
Diluted (in dollars per share)	$ 0.10	$ 0.13	$ 0.20	$ 0.23
Weighted average common shares outstanding
Basic (in shares)	71,517,442	68,596,652	71,217,137	67,864,742
Diluted (in shares)	75,478,649	72,673,154	75,255,048	73,095,644

Condensed Consolidated Stateme5

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 6 months ended Jun. 30, 2015 - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Receivables from Stockholder [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Dec. 31, 2014	70,702,688
Balance at Dec. 31, 2014	$ 707,000	$ 216,061,000	$ (24,000)	$ (21,000)	$ (51,056,000)	$ 165,667,000
Exercise of stock options (in shares)	1,029,598					1,029,598
Exercise of stock options	$ 10,000	6,101,000				$ 6,111,000
Issuance of common stock- employee stock purchase plan (in shares)	88,889
Issuance of common stock- employee stock purchase plan	$ 1,000	1,478,000				1,479,000
Excess tax benefits on stock options and awards		7,416,000				7,416,000
Stock based compensation - stock options and awards		$ 7,947,000				7,947,000
Unrealized gain on available-for-sale securities			$ 7,000			7,000
Net income (loss)					$ 15,337,000	15,337,000
Balance (in shares) at Jun. 30, 2015	71,821,175
Balance at Jun. 30, 2015	$ 718,000	$ 239,003,000	$ (17,000)	$ (21,000)	$ (35,719,000)	$ 203,964,000

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net income	$ 15,337,000	$ 17,123,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,457,000	1,107,000
Stock-based compensation	7,947,000	8,187,000
Deferred income tax benefit	(1,513,000)	$ (1,622,000)
Loss on disposal of assets	41,000
Excess tax benefits on stock options and awards	(7,416,000)	$ (12,399,000)
Changes in operating assets and liabilities:
Accounts receivable	(12,606,000)	626,000
Inventories	(772,000)	(10,178,000)
Prepaid expenses and other current assets	(424,000)	(1,311,000)
Accounts payable, accrued expenses and other current liabilities	29,042,000	19,652,000
Net cash provided by operating activities	$ 32,093,000	21,185,000
Cash flows from investing activities:
Change in restricted cash		400,000
Purchase of investments	$ (23,063,000)	(29,164,000)
Purchases of property and equipment	(8,106,000)	(8,414,000)
Net cash used in investing activities	(31,169,000)	(37,178,000)
Cash flows from financing activities:
Proceeds from issuance of common stock	1,478,000	1,108,000
Excess tax benefits on stock options and awards	7,416,000	12,399,000
Proceeds from exercise of stock options	6,111,000	3,243,000
Net cash provided by financing activities	15,005,000	16,750,000
Change in cash and cash equivalents	15,929,000	757,000
Cash and cash equivalents, beginning of period	58,106,000	45,382,000
Cash and cash equivalents, end of period	74,035,000	46,139,000
Supplemental cash flow disclosures:
Cash paid for interest expense	0	0
Cash paid for income taxes	$ 3,350,000	$ 2,199,000

Note 1 - Nature of Business and

Note 1 - Nature of Business and Basis of Presentation	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	1. Nature of Business and Basis of Presentation Insys Therapeutics, Inc., which was incorporated in Delaware in June 1990, and our subsidiaries (collectively, “we,” “us,” and “our”) maintain headquarters in Chandler, Arizona. We are a specialty pharmaceutical company that develops and commercializes innovative supportive care products. We have two marketed products: Subsys, a proprietary sublingual fentanyl spray for breakthrough cancer pain in opioid-tolerant patients and Dronabinol SG Capsule, a generic equivalent to Marinol, an approved second-line treatment for chemotherapy-induced nausea and vomiting and anorexia associated with weight loss in patients with AIDS. The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles, pursuant to rules and regulations of the SEC. Certain information and footnote disclosures have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the accompanying condensed consolidated financial statements include normal recurring adjustments that are necessary for a fair presentation of the results for the interim periods presented. These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2014 included in our Annual Report on Form 10-K. The results of operations for the three and six months ended June 30, 2015 are not necessarily indicative of results to be expected for the full fiscal year or any other periods. The preparation of the condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make a number of estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to revenue recognition (which is affected by prescriptions dispensed, wholesaler discounts, patient discount programs, rebates and chargebacks), inventories, stock-based compensation expense, and deferred tax valuation allowances. We base our estimates on historical experience and on various other assumptions that are believed by management to be reasonable under the circumstances. Actual results may differ from these estimates. All significant intercompany balances and transactions have been eliminated in the accompanying unaudited condensed consolidated financial statements. On May 5, 2015, our board of directors approved a two-for-one stock split of our common stock to be effected through a stock dividend. The record date for the stock split was the close of business on May 26, 2015, with share distribution occurring on June 8, 2015. As a result of the dividend, shareholders received one additional share of Insys Therapeutics, Inc. common stock, par value $0.01, for each one share they held as of the record date. All share and per share amounts have been retroactively restated for the effects of this stock split. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. As amended by the FASB in July 2015, the standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements and have not yet determined the method by which we will adopt the standard in 2018. In July 2015, the FASB issued guidance that requires entities to measure most inventory at the lower of cost and NRV, thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. Under the new guidance, inventory is measured at the lower of cost and NRV, which eliminates the need to determine replacement cost and evaluate whether it is above the ceiling (NRV) or below the floor (NRV less a normal profit margin). The guidance defines NRV as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.” The guidance is effective for annual periods beginning after December 15, 2016, and interim periods therein. Early application is permitted. We are currently evaluating the impact of adoption of this guidance on our financial position and results of operations.

Note 2 - Revenue Recognition

Note 2 - Revenue Recognition	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Revenue Recognition [Text Block]	2. Revenue Recognition We recognize revenue from the sale of Subsys and Dronabinol SG Capsule. Revenue is recognized when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred and title has passed, (iii) the price is fixed or determinable and (iv) collectability is reasonably assured. Subsys Subsys was commercially launched in March 2012, and is monitored by an FDA mandated Risk Evaluation and Mitigation program known as the Transmucosal Immediate Release Fentanyl program (“TIRF REMS”). We sell Subsys in the United States to wholesale pharmaceutical distributors, and on a very limited basis directly to retail pharmacies, collectively our customers, subject to rights of return within a period beginning six months prior to, and ending 12 months following, product expiration. Subsys currently has a shelf life of 36 months from the date of manufacture. We record revenue for Subsys at the time the wholesaler receives the shipment. We recognize estimated product sales allowances as a reduction of product sales in the same period the related revenue is recognized. Product sales allowances are based on amounts owed or to be claimed on the related sales. These estimates take into consideration the terms of our agreements with customers and third-party payors and the levels of inventory within the distribution channels that may result in future discounts taken. In certain cases, such as patient assistance programs, we recognize the cost of patient discounts as a reduction of revenue based on estimated utilization. If actual future results vary, we may need to adjust these estimates, which could have an effect on product revenue in the period of adjustment. Our product sales allowances include: Product Returns. Because of the shelf life of our products and our return policy of issuing credits on returned product that is within six months before and up to 12 months after the product expiration date, there may be a significant period of time between when the product is shipped and when we issue credits on returned product. Accordingly, we may have to adjust these estimates, which could have an effect on product sales and earnings in the period of adjustment. The allowance for product returns is included in accrued sales allowances. Wholesaler Discounts. Prompt Pay Discounts Patient Discount Programs Rebates Chargebacks. Dronabinol SG Capsule Dronabinol SG Capsule was commercially launched in December 2011, and we sell Dronabinol SG Capsule exclusively to Mylan Pharmaceuticals, Inc. (“Mylan”) in the United States under a supply and distribution agreement. Pursuant to the terms of the Mylan agreement, we manufacture Dronabinol SG Capsule under the Mylan label. Mylan distributes Dronabinol SG Capsule and on a monthly basis pays us an amount equal to the value of Dronabinol SG Capsule it sold to wholesale pharmaceutical distributors, less contractually defined deductions for chargebacks, rebates, sales discounts, distribution and storage fees, and royalties. Under the terms of the supply and distribution agreement with Mylan, we are obligated to pay Mylan a royalty of between 10% and 20% on Mylan’s net product sales, and a single digit percentage fee on such sales for distribution and storage services. We bear no risk of product return upon acceptance by Mylan. As Mylan has control over the amount it charges to wholesale pharmaceutical distributors for Dronabinol SG Capsule and the discounts offered to the distributors, the sales price is not fixed and determinable at the date we ship such products to Mylan. Accordingly, we recognize revenue upon Mylan’s sale of products to wholesale distributors, which is the point at which the sales price is fixed and determinable. The allowance for chargebacks is included in accrued sales allowances. See Note 6 for a discussion on our ongoing dispute with Mylan.

Note 3 - Short-term and Long-te

Note 3 - Short-term and Long-term Investments	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Investment [Text Block]	3. Short-Term and Long-Term Investments Our policy for short-term and long-term investments is to establish a high-quality portfolio that preserves principal, meets liquidity needs, avoids inappropriate concentrations and delivers an appropriate yield in relationship to our investment guidelines and market conditions. Short-term and long-term investments consist of corporate and various government agency and municipal debt securities, as well as certificates of deposit that have maturity dates that are greater than 90 days. Certificates of deposit are carried at cost which approximates fair value. We classify our marketable securities as available-for-sale in accordance with FASB Accounting Standards Codification Topic 320, Investments — Debt and Equity Securities Investments consisted of the following at June 30, 2015 (in thousands): Cost Unrealized Gains Unrealized Losses Other- Than- Temporary Impairment Losses Fair Value Cash and Cash Equivalents Short-term Investments Long-term Investments Cash $ 54,164 $ - $ - $ - $ 54,164 $ 54,164 $ - $ - Money market securities 18,851 - - - 18,851 18,851 - - Certificates of deposit 14,802 - - - 14,802 - 5,401 9,401 Marketable securities: Corporate securities 17,982 - (26 ) - 17,956 600 9,269 8,087 Federal agency securities 11,244 4 (7 ) - 11,241 - 7,617 3,624 Municipal securities 28,098 18 (6 ) - 28,110 420 18,961 8,729 Total marketable securities 57,324 22 (39 ) - 57,307 1,020 35,847 20,440 $ 145,141 $ 22 $ (39 ) $ - $ 145,124 $ 74,035 $ 41,248 $ 29,841 Investments consisted of the following at December 31, 2014 (in thousands): Cost Unrealized Gains Unrealized Losses Other- Than- Temporary Impairment Losses Fair Value Cash and Cash Equivalents Short-term Investments Long-term Investments Cash $ 44,785 $ - $ - $ - $ 44,785 $ 44,785 $ - $ - Money market securities 13,321 - - - 13,321 13,321 - - Certificates of deposit 12,657 - - - 12,657 - 3,160 9,497 Marketable securities: - Corporate securities 10,837 - (26 ) - 10,811 - 6,229 4,582 Federal agency securities 9,512 - (10 ) - 9,502 - 5,009 4,493 Municipal securities 15,037 15 (3 ) - 15,049 - 10,359 4,690 Total marketable securities 35,386 15 (39 ) - 35,362 - 21,597 13,765 $ 106,149 $ 15 $ (39 ) $ - $ 106,125 $ 58,106 $ 24,757 $ 23,262 The amortized cost and estimated fair value of the marketable securities at June 30, 2015, by maturity, are shown below (in thousands): June 30, 2015 Cost Fair Value Marketable securities: Due in one year or less $ 36,864 $ 36,867 Due after one year through 5 years 20,460 20,440 Due after 5 years through 10 years - - Due after 10 years - - $ 57,324 $ 57,307 The following table shows the gross unrealized losses and the fair value of our investments, with unrealized losses that are not deemed to be other-than-temporarily impaired aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2015 (in thousands): June 30, 2015 Less Than 12 Months Greater Than 12 Months Fair Value Unrealized Loss Fair Value Unrealized Loss Marketable securities: Corporate securities $ 15,404 $ (26 ) $ - $ - Federal agency securities 3,623 (7 ) - - Municipal securities 6,478 (6 ) - - $ 25,505 $ (39 ) $ - $ - As of June 30, 2015, we have concluded that the unrealized losses on our marketable securities are temporary in nature. Marketable securities are reviewed quarterly for possible other-than-temporary impairment. This review includes an analysis of the facts and circumstances of each individual investment such as the severity of loss, the expectation for that security’s performance and the creditworthiness of the issuer. Additionally, we do not intend to sell, and it is not probable that we will be required to sell, any of the securities before the recovery of their amortized cost basis.

Note 4 - Fair Value Measurement

Note 4 - Fair Value Measurement	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Fair Value Disclosures [Text Block]	4. Fair Value Measurement FASB ASC No. 820, “Fair Value Measurement” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. At June 30, 2015, we held short-term and long-term investments, as discussed in Note 3, that are required to be measured at fair value on a recurring basis. All available-for-sale investments held by us at June 30, 2015 have been valued based on Level 2 inputs. Available-for-sale securities classified within Level 2 of the fair value hierarchy are valued utilizing reports from third-party asset managers that hold our investments, showing closing prices on the last business day of the period presented. These asset managers utilize an independent pricing source to obtain quotes for most fixed income securities, and utilize internal procedures to validate the prices obtained. In addition, we use an independent third-party to perform price testing, comparing a sample of quoted prices listed in the asset managers’ reports to quotes listed through a public quotation service. Our investments measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820, Fair Value Measurements and Disclosures Fair Value Measurement at Reporting Date June 30, 2015 Quoted Prices in active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Marketable securities: Corporate securities $ 17,956 $ - $ 17,956 $ - Federal agency securities 11,241 - 11,241 - Municipal securities 28,110 - 28,110 - Total assets measured at fair value $ 57,307 $ - $ 57,307 $ - Fair Value Measurement at Reporting Date December 31, 2014 Quoted Prices in active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Marketable securities: Corporate securities $ 10,811 $ - $ 10,811 $ - Federal agency securities 9,502 - 9,502 - Municipal securities 15,049 - 15,049 - Total assets measured at fair value $ 35,362 $ - $ 35,362 $ -

Note 5 - Inventories

Note 5 - Inventories	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Inventory Disclosure [Text Block]	5. Inventories Inventories are stated at lower of cost or market. Cost, which includes amounts related to materials and costs incurred by our contract manufacturers, is determined on a first-in, first-out basis. Inventories are reviewed periodically for potential excess, dated or obsolete status. Management evaluates the carrying value of inventories on a regular basis, taking into account such factors as historical and anticipated future sales compared to quantities on hand, the price we expect to obtain for products in their respective markets compared with historical cost and the remaining shelf life of goods on hand. The components of inventories, net of allowances, are as follows (in thousands): June 30, 2015 December 31, 2014 Finished goods $ 25,395 $ 30,998 Work-in-process 7,941 4,316 Raw materials and supplies 5,709 2,785 Total inventories 39,045 38,099 Less: non-current work-in-process (3,492 ) (3,318 ) $ 35,553 $ 34,781 As of June 30, 2015 and December 31, 2014, raw materials inventories consisted of raw materials used in the manufacture of the active pharmaceutical ingredient (“API”) in our U.S.-based, state-of-the-art dronabinol manufacturing facility and component parts and packaging materials used in the manufacture of Subsys. Work-in-process consists of actual production costs, including facility overhead and tolling costs of in-process Dronabinol SG Capsule and Subsys products. Finished goods inventories consisted of finished Dronabinol SG Capsule and Subsys products. Non-current work-in-process represent those inventories pending FDA approval which is not expected before March 31, 2016 and are included in other assets in our condensed consolidated unaudited balance sheets.

Note 6 - Commitments and Contin

Note 6 - Commitments and Contingencies	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Commitments and Contingencies Disclosure [Text Block]	6. Commitments and Contingencies Legal Matters Other than the matters that we have disclosed below, we from time to time become involved in various ordinary course legal and administrative proceedings, which include intellectual property, commercial, governmental and regulatory investigations, employee related issues and private litigation, which we do not believe are either individually or collectively material. As legal and governmental proceedings are inherently unpredictable and, in part, beyond our control, unless otherwise indicated, we cannot reasonably predict the outcome of these legal proceedings, nor can we estimate the amount of loss, or range of loss, if any, that may result from these proceedings. An adverse outcome in any of these proceedings could have a material adverse effect on our business, financial condition, results of operations and cash flows, and could cause the market value of our common shares to decline. Government Proceedings Like other companies in the pharmaceutical industry, we are subject to extensive regulation by national, state and local government agencies in the United States. As a result, interaction with government agencies occurs in the normal course of our operations. The following is a brief description of pending governmental investigations which we believe are potentially material at this time. It is possible that criminal charges and substantial payments, fines and/or civil penalties or damages could result from any government investigation or proceeding, as well as a corporate integrity agreement or similar government mandated compliance document, whether we deem an investigation to be material or not at this time. Department of Health and Human Services Investigation. Health Insurance Portability and Accountability Act Investigation. On or about June 23, 2015, a nurse practitioner located in Connecticut, who served on our speaker bureau in connection with our speaker programs designed to educate and promote product awareness and safety for external health care providers, pled guilty to violating the federal Anti-Kickback Statute in connection with payments of approximately $83,000 from the Company. We are currently looking into these issues. State Related Investigations. In connection with the investigation by the ODOJ we have entered into a settlement agreement with the ODOJ referred to as an AVC, and agreed to make monetary payments totaling approximately $1,100,000. The AVC requires us to maintain certain controls and processes around our promotional and sales activity related to Subsys in Oregon. This AVC expressly provides that we do not admit any violation of law or regulation. This settlement was reached as result of our cooperation with the ODOJ's investigation and after producing documents in response to certain CIDs and related requests for information from the ODOJ. We believe that the probability of unfavorable outcome or loss related to these governmental proceedings, with the exception of the ODOJ investigation, and an estimate of the amount or range of loss, if any, from an unfavorable outcome are not determinable at this time. We believe we have meritorious legal positions and will continue to represent our interests vigorously in these matters. However, responding to government investigations, defending any claims raised, and any resulting fines, restitution, damages and penalties, settlement payments or administrative actions, as well as any related actions brought by shareholders or other third parties, could have a material impact on our reputation, business and financial condition and divert the attention of our management from operating our business. Federal Securities Litigation Between May 15 and May 19, 2014, two complaints (captioned Larson v. Insys Therapeutics, Inc., Case No. 14-cv-01043-GMS) and (Li vs. Insys Therapeutics, Inc., Case No 14-cv-01077-DGC) were filed in the U.S. District Court for the District of Arizona, or Arizona District Court, against us and certain of our current officers. The complaints were brought as purported class actions, on behalf of purchasers of our common stock. In general, the plaintiffs allege that the defendants violated federal securities laws by making intentionally false and misleading statements regarding our business and operations, therefore artificially inflating the price of our common stock. The plaintiffs seek unspecified monetary damages and other relief. On July 14, 2014, several purported shareholders filed motions to consolidate the two cases, appoint a lead plaintiff, and appoint lead counsel. On August 29, 2014, the Arizona District Court issued an order consolidating the action, appointing Hongwei Li as lead plaintiff, and appointing the lead counsel. Lead plaintiffs complaint was filed on October 27, 2014. On December 11, 2014, we moved to dismiss the amended consolidated complaint. On March 19, 2015, the parties participated in a mediation and the parties subsequently agreed in principle, on April 14, 2015, to settle the action. On April 20, 2015, the parties filed a Notice of Settlement with the Court. On April 29, 2015, the Court ordered that the lawsuit be dismissed within 60 days, vacated all pending hearings, and denied all pending motions as moot. On May 28, 2015, the parties filed a Stipulation of Settlement, which provided the terms of a settlement agreement. On June 2, 2015, the Court granted preliminary approval of the settlement agreement and the potential class members have been (or will be) notified of the proposed settlement and the procedure by which they can object to the settlement or request to be excluded from the class. The settlement remains subject to final approval by the Court and the Court has scheduled a settlement hearing for December 5, 2015. Because we have met our retainage amount under the applicable policy, we believe that any potential obligations that may arise as result of the proposed settlement in this matter will be fully covered under our Directors and Officers insurance policy. Accordingly, we have not accrued for any contingencies in this matter into our operating results. General Litigation and Disputes Kottayil vs. Insys Pharma, Inc. In February 2010, Insys Pharma and the other defendants answered and filed counter-claims to Dr. Kottayil’s amended complaint. The counter-claims include actions for breach of fiduciary duty, fraud and negligent misrepresentations and omissions with respect to the time during which Dr. Kottayil was employed at Insys Pharma. The counter-claims, among other relief, seek compensatory and punitive damages. Discovery on all of the foregoing claims was completed and a trial was scheduled to commence on January 27, 2014; however, on January 22, 2014, the court vacated the trial and granted plaintiffs leave to file an amended complaint to add Insys Therapeutics, Inc. as a defendant. On January 29, 2014, the plaintiffs filed a second amended complaint in the Arizona Superior Court in which Insys Therapeutics, Inc. was also named as defendant in this lawsuit. This amended complaint filed by plaintiffs re-alleges substantially the same claims set forth in the prior complaint, except that plaintiffs now allege that they are entitled to rescissory damages, plaintiffs have also added our majority stockholder, a private trust, as a defendant to the breach of fiduciary duty claim and plaintiffs have revised their fraud claim against the Insys Pharma director defendants. On February 25, 2014, we filed a Motion to Dismiss the Kottayil Plantiffs’ claims for a statutory and common law appraisal. The motion was denied on May 2, 2014. The trial commenced on December 1, 2014 with the evidence phase of the trial completed on January 29, 2015. On June 8, 2015, the court issued findings of fact and conclusions of law in its final trial ruling. Specifically, the court found (i) in favor of Insys Pharma, our majority stockholder, a private trust and four of the Insys Pharma directors who were on the board in July 2008 on plaintiffs’ claim for breach of fiduciary duty arising out of transactions the board approved in July 2008, (ii) found in favor of plaintiffs and against Insys Pharma, Inc., our majority stockholder, a private trust and three of the Insys Pharma directors who were on the board in June 2009 on plaintiffs’ claims under Delaware law and for breach of fiduciary duties arising out of the reverse stock split the board approved in June 2009 in the amount of $7,317,450, along with pre-judgment and post-judgment interest and court costs, (iii) found in favor of two of the Insys Pharma directors who were on the Insys Pharma board as of June 2009 and against plaintiffs on plaintiffs’ breach of fiduciary duty claims, (iv) found in favor of Insys Pharma and against plaintiff (Kottayil) on his claim for rescission of the patent application assignments that he entered in favor of Insys Pharma before and after his employment terminated, (v) found in favor of us and against plaintiff on plaintiffs' claims of successor liability and fraudulent transfer, and (vi) found in favor of Kottayil and against Insys Pharma on Insys Pharma's counterclaims of breach of fiduciary duty, fraud, and negligent misrepresentation. The court still has to resolve certain post-trial issues, which are currently being briefed by the parties, before a final judgment is entered. As a result of the final ruling, we have accrued $10,304,000 at June 30, 2015 including $3,014,000 of estimated pre-and post-judgement interest. Any final judgement entered by the court is subject to a potential appeal which could cause the estimates to vary materially from the final award. Insys Therapeutics, Inc. vs. Mylan Pharmaceuticals . On May 31, 2013, Mylan filed a demand with the American Arbitration Association, Case No. 55 122 00119 13. Mylan’s demand alleged that we were in breach of the Distribution Agreement. On July 10, 2013, we filed a response to Mylan’s demand, denying we were in breach of the Distribution Agreement, and asserting counterclaims based on Mylan’s material breach of the Distribution Agreement and the duty of good faith and fair dealing. On January 21, 2014, Mylan filed a second new lawsuit against us with the District Court, as Case No. 2:14-cv-00119-GMS, asserting a claim for declaratory judgment and seeking a temporary restraining order and preliminary injunction relating to our notice of termination of the Distribution Agreement with respect to the parties’ failure to agree on floor pricing. On January 24, 2014, we responded in opposition to the application for temporary restraining order and preliminary injunction, or Application. A hearing was initially set for April 3, 2014. After stipulation of the parties to postpone the hearing, the Court denied all pending motions as moot on April 2, 2014. The Application was dismissed by the Court with prejudice on June 2, 2014. After the Application was dismissed, Mylan filed a Motion to Enforce a draft settlement agreement between the parties. We responded in opposition and the District Court denied Mylan’s motion on September 12, 2014. We have moved for sanctions against Mylan for filing the motion to enforce and we intend to seek damages and attorneys’ fees as part of this arbitration. On September 23, 2014, the three member arbitration panel held a preliminary hearing wherein it decided that the arbitration proceeding would be bifurcated. The first phase of the proceeding will determine whether there has been a material breach of the Agreement. If either party is successful in establishing its claims during this first phase then there will be a second phase of the arbitration to determine damages. In November 2014, the arbitration panel held Phase I of the arbitration proceeding which we anticipate will resolve (1) whether Mylan materially breached the Agreement by failing to accept the delivery of conforming shipments of product in October 2012, January 2014 and March 2014; (2) whether Mylan has materially breached the parties’ Supply and Distribution Agreement by failing to use commercially reasonable efforts to market and sell the product; and (3) whether we are in breach of the Agreement by delivering non-conforming product. On June 23, 2015, the Panel issued an interim order in connection with Phase I. The Panel’s order found that (1) Mylan did not breach the Agreement with respect to the October 2012 shipment of the product, and (2) our termination of the Agreement because of the parties’ dispute over floor pricing was effective as of March 22, 2014. The Panel determined that there was no need to address the issue of whether we properly terminated the Agreement because of the January 2014 or March 2014 shipments of the products. The Panel also determined that it is necessary to hold proceedings for Phase II of the arbitration to determine the amount, if any, of damages suffered by either party or whether Mylan used commercially reasonable efforts to sell the product. The parties have submitted preliminary briefing on their positions related to damages and the Panel has scheduled a hearing for August 12, 2015. Except as it pertains to the $10,304,000 accrued for the dispute with Dr. Kottayil, the $1,100,000 accrued in connection with the ODOJ settlement payment and the potential for damages in the Federal Securities litigation that should be sufficiently covered by our Director and Officers insurance policies as noted above, we believe that the probability of unfavorable outcome or loss related to all of the above litigation matters and an estimate of the amount or range of loss, if any, from an unfavorable outcome are not determinable at this time. We believe we have meritorious legal positions and will continue to represent our interests vigorously in these matters but the range possible outcomes on these matters is very broad and we are not able to provide a reasonable estimate of our potential liability, if any, nor are we able to predict the outcome of each litigation matter. Responding to each of these litigation matters, defending any claims raised, and any resulting fines, restitution, damages and penalties, or settlement payments as well as any related actions brought by shareholders or other third parties, could have a material impact on our reputation, business and financial condition and divert the attention of our management from operating our business. Material Agreements In April 2015, we entered into an amendment to our manufacturing and supply agreement with DPT, which extends our existing manufacturing and supply agreement to produce Subsys until the end of 2020. In addition to extending the term, this amendment added certain minimum purchase commitments. The following table sets forth minimum purchase commitments with DPT under this agreement (in thousands): Years ending December 31, 2015 - 2016 - 2017 8,450 2018 11,150 2019 13,850 Thereafter 16,290 Total $ 49,740

Note 7 - Stock-based Compensati

Note 7 - Stock-based Compensation	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	7. Stock-based Compensation Amounts recognized in the condensed consolidated statements of income and comprehensive income with respect to our stock-based compensation plans were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Research and development $ 448 $ 3,535 $ 789 $ 3,862 General and administrative 3,779 2,196 7,158 4,325 Total cost of stock-based compensation $ 4,227 $ 5,731 $ 7,947 $ 8,187 As of June 30, 2015, we expected to recognize $40,409,000 of stock-based compensation for outstanding options over a weighted-average period of 3.0 years. The following table summarizes stock option activity as of December 31, 2014 and for the six months ended June 30, 2015: Weighted Weighted Average Aggregate Average Remaining Intrinsic Number of Exercise Contractual Value Shares Price Term (in years) (in millions) Vested and exercisable as of December 31, 2014 2,660,720 $ 3.95 Outstanding as of December 31, 2014 7,707,162 $ 7.57 Granted 848,000 $ 27.41 Cancelled (199,606 ) $ 16.21 Exercised (1,029,598 ) $ 5.93 Outstanding as of June 30, 2015 7,325,958 $ 9.86 8.0 $ 190.9 Vested and exercisable as of June 30, 2015 2,737,436 $ 4.81 7.0 $ 85.1 Cash received from option exercises under all share-based payment arrangements for the six months ended June 30, 2015 and 2014 was $6,111,000 and $3,243,000, respectively. For the six months ended June 30, 2015, we recorded net reductions of $7,416,000 of our federal and state income tax liability, with an offsetting credit to additional paid-in capital, resulting from the excess tax benefits of stock options.

Note 8 - Net Income Per Share

Note 8 - Net Income Per Share	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Earnings Per Share [Text Block]	8. Net Income per Share Basic net income per common share is computed by dividing the net income allocable to the common stockholders by the weighted average number of common shares outstanding during the period. The diluted income per share further includes any common shares available to be issued upon exercise of outstanding stock options if such inclusion would be dilutive. The following table sets forth the computation of basic and diluted net income per common share (dollars in thousands, except per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Historical net income per share - Basic Numerator: Net income $ 7,314 $ 9,465 $ 15,337 $ 17,123 Denominator: Weighted average number of common shares outstanding 71,517,442 68,596,652 71,217,137 67,864,742 Basic net income per common share $ 0.10 $ 0.14 $ 0.22 $ 0.25 Historical net income per share - Diluted Numerator: Net income $ 7,314 $ 9,465 $ 15,337 $ 17,123 Denominator: Weighted average number of common shares outstanding 71,517,442 68,596,652 71,217,137 67,864,742 Effect of dilutive stock options 3,961,207 4,076,502 4,037,911 5,230,902 Weighted average number of common shares outstanding 75,478,649 72,673,154 75,255,048 73,095,644 Diluted net income per common share $ 0.10 $ 0.13 $ 0.20 $ 0.23 Anti-dilutive share equivalents included 1,274,490 and 1,797,008 outstanding stock options as of June 30, 2015 and 2014, respectively.

Note 9 - Product Lines, Concent

Note 9 - Product Lines, Concentration of Credit Risk and Significant Customers	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Concentration Risk Disclosure [Text Block]	9. Product Lines, Concentration of Credit Risk and Significant Customers We are engaged in the business of developing and selling pharmaceutical products. We have two product lines, consisting of Subsys and Dronabinol SG Capsule. Our chief operating decision-maker evaluates revenues based on product lines. The following tables summarize our net revenue by product line, as well as the percentages of revenue by route to market (in thousands): Net Revenue by Product Line Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Subsys $ 76,700 $ 54,576 $ 147,240 $ 95,229 Dronabinol SG Capsule 933 1,120 1,163 2,103 Total net revenue $ 77,633 $ 55,696 $ 148,403 $ 97,332 Percent of Revenue by Route to Market Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Pharmaceutical wholesalers 99 % 98 % 99 % 98 % Generic pharmaceutical distributors 1 % 2 % 1 % 2 % 100 % 100 % 100 % 100 % All our products are sold in the United States of America. Product shipments to four pharmaceutical wholesalers accounted for 33%, 20%, 18% and 15% of total shipments for the six months ended June 30, 2015. Product shipments to four pharmaceutical wholesalers accounted for 38%, 17%, 15% and 12% of total shipments for the six months ended June 30, 2014. Four pharmaceutical wholesalers’ accounts receivable balances accounted for 35%, 20%, 18%, and 12% of gross accounts receivable as of June 30, 2015. Four pharmaceutical wholesalers’ accounts receivable balances accounted for 26%, 24%, 23% and 14% of gross accounts receivable as of December 31, 2014.

Note 10 - Related Party Transac

Note 10 - Related Party Transactions	6 Months Ended
	Jun. 30, 2015
Notes to Financial Statements
Related Party Transactions Disclosure [Text Block]	10. Related Party Transactions In March of 2015, we entered into a consultancy agreement with Dr. John Kapoor, our Executive Chairman of our Board of Directors and our majority shareholder, to compensate Dr. Kapoor for his ongoing time and contribution to the Company. Under the terms of the agreement, Dr. Kapoor will receive an annual consulting fee of $300,000.

Note 3 - Short-term and Long-17

Note 3 - Short-term and Long-term Investments (Tables)	6 Months Ended
	Jun. 30, 2015
Notes Tables
Available-for-sale Securities [Table Text Block]	Cost Unrealized Gains Unrealized Losses Other- Than- Temporary Impairment Losses Fair Value Cash and Cash Equivalents Short-term Investments Long-term Investments Cash $ 54,164 $ - $ - $ - $ 54,164 $ 54,164 $ - $ - Money market securities 18,851 - - - 18,851 18,851 - - Certificates of deposit 14,802 - - - 14,802 - 5,401 9,401 Marketable securities: Corporate securities 17,982 - (26 ) - 17,956 600 9,269 8,087 Federal agency securities 11,244 4 (7 ) - 11,241 - 7,617 3,624 Municipal securities 28,098 18 (6 ) - 28,110 420 18,961 8,729 Total marketable securities 57,324 22 (39 ) - 57,307 1,020 35,847 20,440 $ 145,141 $ 22 $ (39 ) $ - $ 145,124 $ 74,035 $ 41,248 $ 29,841 Cost Unrealized Gains Unrealized Losses Other- Than- Temporary Impairment Losses Fair Value Cash and Cash Equivalents Short-term Investments Long-term Investments Cash $ 44,785 $ - $ - $ - $ 44,785 $ 44,785 $ - $ - Money market securities 13,321 - - - 13,321 13,321 - - Certificates of deposit 12,657 - - - 12,657 - 3,160 9,497 Marketable securities: - Corporate securities 10,837 - (26 ) - 10,811 - 6,229 4,582 Federal agency securities 9,512 - (10 ) - 9,502 - 5,009 4,493 Municipal securities 15,037 15 (3 ) - 15,049 - 10,359 4,690 Total marketable securities 35,386 15 (39 ) - 35,362 - 21,597 13,765 $ 106,149 $ 15 $ (39 ) $ - $ 106,125 $ 58,106 $ 24,757 $ 23,262
Schedule of Available-for-sale Securities Reconciliation [Table Text Block]	June 30, 2015 Cost Fair Value Marketable securities: Due in one year or less $ 36,864 $ 36,867 Due after one year through 5 years 20,460 20,440 Due after 5 years through 10 years - - Due after 10 years - - $ 57,324 $ 57,307
Schedule of Unrealized Loss on Investments [Table Text Block]	June 30, 2015 Less Than 12 Months Greater Than 12 Months Fair Value Unrealized Loss Fair Value Unrealized Loss Marketable securities: Corporate securities $ 15,404 $ (26 ) $ - $ - Federal agency securities 3,623 (7 ) - - Municipal securities 6,478 (6 ) - - $ 25,505 $ (39 ) $ - $ -

Note 4 - Fair Value Measureme18

Note 4 - Fair Value Measurement (Tables)	6 Months Ended
	Jun. 30, 2015
Notes Tables
Fair Value, Assets Measured on Recurring Basis [Table Text Block]	Fair Value Measurement at Reporting Date June 30, 2015 Quoted Prices in active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Marketable securities: Corporate securities $ 17,956 $ - $ 17,956 $ - Federal agency securities 11,241 - 11,241 - Municipal securities 28,110 - 28,110 - Total assets measured at fair value $ 57,307 $ - $ 57,307 $ - Fair Value Measurement at Reporting Date December 31, 2014 Quoted Prices in active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Marketable securities: Corporate securities $ 10,811 $ - $ 10,811 $ - Federal agency securities 9,502 - 9,502 - Municipal securities 15,049 - 15,049 - Total assets measured at fair value $ 35,362 $ - $ 35,362 $ -

Note 5 - Inventories (Tables)

Note 5 - Inventories (Tables)	6 Months Ended
	Jun. 30, 2015
Notes Tables
Schedule of Inventory, Current [Table Text Block]	June 30, 2015 December 31, 2014 Finished goods $ 25,395 $ 30,998 Work-in-process 7,941 4,316 Raw materials and supplies 5,709 2,785 Total inventories 39,045 38,099 Less: non-current work-in-process (3,492 ) (3,318 ) $ 35,553 $ 34,781

Note 6 - Commitments and Cont20

Note 6 - Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 30, 2015
Notes Tables
Long-term Purchase Commitment [Table Text Block]	Years ending December 31, 2015 - 2016 - 2017 8,450 2018 11,150 2019 13,850 Thereafter 16,290 Total $ 49,740

Note 7 - Stock-based Compensa21

Note 7 - Stock-based Compensation (Tables)	6 Months Ended
	Jun. 30, 2015
Notes Tables
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]	Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Research and development $ 448 $ 3,535 $ 789 $ 3,862 General and administrative 3,779 2,196 7,158 4,325 Total cost of stock-based compensation $ 4,227 $ 5,731 $ 7,947 $ 8,187
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]	Weighted Weighted Average Aggregate Average Remaining Intrinsic Number of Exercise Contractual Value Shares Price Term (in years) (in millions) Vested and exercisable as of December 31, 2014 2,660,720 $ 3.95 Outstanding as of December 31, 2014 7,707,162 $ 7.57 Granted 848,000 $ 27.41 Cancelled (199,606 ) $ 16.21 Exercised (1,029,598 ) $ 5.93 Outstanding as of June 30, 2015 7,325,958 $ 9.86 8.0 $ 190.9 Vested and exercisable as of June 30, 2015 2,737,436 $ 4.81 7.0 $ 85.1

Note 8 - Net Income Per Share (

Note 8 - Net Income Per Share (Tables)	6 Months Ended
	Jun. 30, 2015
Notes Tables
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Historical net income per share - Basic Numerator: Net income $ 7,314 $ 9,465 $ 15,337 $ 17,123 Denominator: Weighted average number of common shares outstanding 71,517,442 68,596,652 71,217,137 67,864,742 Basic net income per common share $ 0.10 $ 0.14 $ 0.22 $ 0.25 Historical net income per share - Diluted Numerator: Net income $ 7,314 $ 9,465 $ 15,337 $ 17,123 Denominator: Weighted average number of common shares outstanding 71,517,442 68,596,652 71,217,137 67,864,742 Effect of dilutive stock options 3,961,207 4,076,502 4,037,911 5,230,902 Weighted average number of common shares outstanding 75,478,649 72,673,154 75,255,048 73,095,644 Diluted net income per common share $ 0.10 $ 0.13 $ 0.20 $ 0.23

Note 9 - Product Lines, Conce23

Note 9 - Product Lines, Concentration of Credit Risk and Significant Customers (Tables)	6 Months Ended
	Jun. 30, 2015
Notes Tables
Revenue from External Customers by Products and Services [Table Text Block]	Net Revenue by Product Line Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Subsys $ 76,700 $ 54,576 $ 147,240 $ 95,229 Dronabinol SG Capsule 933 1,120 1,163 2,103 Total net revenue $ 77,633 $ 55,696 $ 148,403 $ 97,332
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block]	Percent of Revenue by Route to Market Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Pharmaceutical wholesalers 99 % 98 % 99 % 98 % Generic pharmaceutical distributors 1 % 2 % 1 % 2 % 100 % 100 % 100 % 100 %

Note 1 - Nature of Business a24

Note 1 - Nature of Business and Basis of Presentation (Details Textual)	May. 26, 2015$ / sharesshares	Jun. 30, 2015$ / shares	Dec. 31, 2014$ / shares
Stock Issued during Period Per Share, Stock Split	1
Stockholders' Equity Note, Stock Split, Conversion Ratio	2
Common Stock, Par or Stated Value Per Share | $ / shares	$ 0.01	$ 0.01	$ 0.01

Note 2 - Revenue Recognition (D

Note 2 - Revenue Recognition (Details Textual) - Jun. 30, 2015	Total
Subsys [Member]
Product Return, Period Prior to Expiration	180 days
Product Return, Period After Expiration	1 year
Shelf Life of Product from Date of Manufacture	3 years
Mylan Pharmaceuticals, Inc [Member] | Minimum [Member]
Royalty Obligation as Percentage of Net Sales	10.00%
Mylan Pharmaceuticals, Inc [Member] | Maximum [Member]
Royalty Obligation as Percentage of Net Sales	20.00%
Mylan Pharmaceuticals, Inc [Member]
Cash Discount, Percent	2.00%

Note 3 - Short-term and Long-26

Note 3 - Short-term and Long-term Investments (Details Textual) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Available-for-sale Securities [Member]
Short-term Investments	$ 41,248,000	$ 41,248,000
Long-term Investments	29,841,000	29,841,000
Gain (Loss) on Investments	0	0
Short-term Investments	41,248,000	41,248,000	$ 24,757,000
Long-term Investments	$ 29,841,000	$ 29,841,000	$ 23,262,000

Note 3 - Short-term and Long-27

Note 3 - Short-term and Long-term Investments - Summary of Investments (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Cash [Member]
Amortized Cost	$ 54,164,000	$ 44,785,000
Unrealized Gains
Unrealized Losses
Fair Value	$ 54,164,000	$ 44,785,000
Cash and Cash Equivalents	$ 54,164,000	$ 44,785,000
Short-term Investments
Long-term Investments
Money Market Funds [Member]
Amortized Cost	$ 18,851,000	$ 13,321,000
Unrealized Gains
Unrealized Losses
Fair Value	$ 18,851,000	$ 13,321,000
Cash and Cash Equivalents	$ 18,851,000	$ 13,321,000
Short-term Investments
Long-term Investments
Certificates of Deposit [Member]
Amortized Cost	$ 14,802,000	$ 12,657,000
Unrealized Gains
Unrealized Losses
Fair Value	$ 14,802,000	$ 12,657,000
Cash and Cash Equivalents
Short-term Investments	$ 5,401,000	$ 3,160,000
Long-term Investments	9,401,000	9,497,000
Corporate Debt Securities [Member]
Amortized Cost	$ 17,982,000	$ 10,837,000
Unrealized Gains
Unrealized Losses	$ (26,000)	$ (26,000)
Fair Value	17,956,000	$ 10,811,000
Cash and Cash Equivalents	600,000
Short-term Investments	9,269,000	$ 6,229,000
Long-term Investments	8,087,000	4,582,000
US Government Agencies Debt Securities [Member]
Amortized Cost	11,244,000	$ 9,512,000
Unrealized Gains	4,000
Unrealized Losses	(7,000)	$ (10,000)
Fair Value	$ 11,241,000	$ 9,502,000
Cash and Cash Equivalents
Short-term Investments	$ 7,617,000	$ 5,009,000
Long-term Investments	3,624,000	4,493,000
Municipal Bonds [Member]
Amortized Cost	28,098,000	15,037,000
Unrealized Gains	18,000	15,000
Unrealized Losses	(6,000)	(3,000)
Fair Value	28,110,000	$ 15,049,000
Cash and Cash Equivalents	420,000
Short-term Investments	18,961,000	$ 10,359,000
Long-term Investments	8,729,000	4,690,000
Marketable Securities [Member]
Amortized Cost	57,324,000	35,386,000
Unrealized Gains	22,000	15,000
Unrealized Losses	(39,000)	(39,000)
Fair Value	57,307,000	$ 35,362,000
Cash and Cash Equivalents	1,020,000
Short-term Investments	35,847,000	$ 21,597,000
Long-term Investments	20,440,000	13,765,000
Amortized Cost	145,141,000	106,149,000
Unrealized Gains	22,000	15,000
Unrealized Losses	(39,000)	(39,000)
Fair Value	145,124,000	106,125,000
Cash and Cash Equivalents	74,035,000	58,106,000
Short-term Investments	41,248,000	24,757,000
Long-term Investments	$ 29,841,000	$ 23,262,000

Note 3 - Short-term and Long-28

Note 3 - Short-term and Long-term Investments - Amortized Cost and Estimated Fair Value of Securities (Details) $ in Thousands	Jun. 30, 2015USD ($)
Marketable securities:
Due in one year or less	$ 36,864
Due in one year or less	36,867
Due after one year through 5 years	20,460
Due after one year through 5 years	$ 20,440
Due after 5 years through 10 years
Due after 5 years through 10 years
Due after 10 years
Due after 10 years
	$ 57,324
	$ 57,307

Note 3 - Short-term and Long-29

Note 3 - Short-term and Long-term Investments - Gross Unrealized Losses (Details) $ in Thousands	Jun. 30, 2015USD ($)
Corporate Bond Securities [Member]
Less Than 12 Months Fair Value	$ 15,404
Less Than 12 Months Unrealized Loss	$ (26)
Greater Than 12 Months Fair Value
Greater Than 12 Months Unrealized Loss
US Government Agencies Debt Securities [Member]
Less Than 12 Months Fair Value	$ 3,623
Less Than 12 Months Unrealized Loss	$ (7)
Greater Than 12 Months Fair Value
Greater Than 12 Months Unrealized Loss
Municipal Bonds [Member]
Less Than 12 Months Fair Value	$ 6,478
Less Than 12 Months Unrealized Loss	$ (6)
Greater Than 12 Months Fair Value
Greater Than 12 Months Unrealized Loss
Less Than 12 Months Fair Value	$ 25,505
Less Than 12 Months Unrealized Loss	$ (39)
Greater Than 12 Months Fair Value
Greater Than 12 Months Unrealized Loss

Note 4 - Fair Value Measureme30

Note 4 - Fair Value Measurement - Investments Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Available-for-sale securities
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available-for-sale securities	$ 17,956	$ 10,811
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Available-for-sale securities
Corporate Debt Securities [Member]
Available-for-sale securities	$ 17,956	$ 10,811
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Available-for-sale securities
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Available-for-sale securities	$ 11,241	$ 9,502
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Available-for-sale securities
US Government Agencies Debt Securities [Member]
Available-for-sale securities	$ 11,241	$ 9,502
Municipal Bonds [Member] | Fair Value, Inputs, Level 1 [Member]
Available-for-sale securities
Municipal Bonds [Member] | Fair Value, Inputs, Level 2 [Member]
Available-for-sale securities	$ 28,110	$ 15,049
Municipal Bonds [Member] | Fair Value, Inputs, Level 3 [Member]
Available-for-sale securities
Municipal Bonds [Member]
Available-for-sale securities	$ 28,110	$ 15,049
Fair Value, Inputs, Level 1 [Member]
Available-for-sale securities
Fair Value, Inputs, Level 2 [Member]
Available-for-sale securities	$ 57,307	$ 35,362
Fair Value, Inputs, Level 3 [Member]
Available-for-sale securities
Available-for-sale securities	$ 57,307	$ 35,362

Note 5 - Inventories - Componen

Note 5 - Inventories - Components of Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Finished goods	$ 25,395	$ 30,998
Work-in-process	7,941	4,316
Raw materials and supplies	5,709	2,785
Total inventories	39,045	38,099
Less: non-current work-in-process	(3,492)	(3,318)
	$ 35,553	$ 34,781

Note 6 - Commitments and Cont32

Note 6 - Commitments and Contingencies (Details Textual) - USD ($)	Jun. 08, 2015	Jun. 30, 2015	Dec. 31, 2014
Settled Litigation [Member] | Oregon Department of Justice [Member]
Litigation Settlement, Amount		$ 1,100,000
Settled Litigation [Member] | Kottayil vs. Insys Pharma, Inc. [Member] | Portion Accrued for Pre-and Post-judgment Interest [Member]
Estimated Litigation Liability, Current		3,014,000
Settled Litigation [Member] | Kottayil vs. Insys Pharma, Inc. [Member]
Litigation Settlement, Amount	$ (7,317,450)
Estimated Litigation Liability, Current		10,304,000
Estimated Litigation Liability, Current		$ 10,356,000	$ 0

Note 6 - Commitments and Cont33

Note 6 - Commitments and Contingencies - Future Minimum Purchase Commitments (Details)	Jun. 30, 2015USD ($)
Years ending December 31,
2,015	$ 0
2,016	0
2,017	8,450,000
2,018	11,150,000
2,019	13,850,000
Thereafter	16,290,000
Total	$ 49,740,000

Note 7 - Stock-based Compensa34

Note 7 - Stock-based Compensation (Details Textual) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 40,409,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	3 years
Proceeds from Stock Options Exercised	$ 6,111,000	$ 3,243,000
Increase (Decrease) in Income Taxes Payable	$ (7,416,000)

Note 7 - Stock-based Compensa35

Note 7 - Stock-based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Research and Development Expense [Member]
Allocated share-based compensation expense	$ 448	$ 3,535	$ 789	$ 3,862
General and Administrative Expense [Member]
Allocated share-based compensation expense	3,779	2,196	7,158	4,325
Allocated share-based compensation expense	$ 4,227	$ 5,731	$ 7,947	$ 8,187

Note 7 - Stock-based Compensa36

Note 7 - Stock-based Compensation - Stock Option Activity (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Vested and exercisable as of December 31, 2014 (in shares)	2,737,436	2,660,720
Vested and exercisable as of December 31, 2014 (in dollars per share)	$ 4.81	$ 3.95
Outstanding as of December 31, 2014 (in shares)	7,707,162
Outstanding as of December 31, 2014 (in dollars per share)	$ 7.57
Granted (in shares)	848,000
Granted (in dollars per share)	$ 27.41
Cancelled (in shares)	(199,606)
Cancelled (in dollars per share)	$ 16.21
Exercised (in shares)	(1,029,598)
Exercised (in dollars per share)	$ 5.93
Outstanding as of June 30, 2015 (in shares)	7,325,958
Outstanding as of June 30, 2015 (in dollars per share)	$ 9.86
Outstanding as of June 30, 2015	8 years
Outstanding as of June 30, 2015	$ 190.9
Vested and exercisable as of June 30, 2015	7 years
Vested and exercisable as of June 30, 2015	$ 85.1

Note 8 - Net Income Per Share37

Note 8 - Net Income Per Share (Details Textual) - shares	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,274,490	1,797,008

Note 8 - Net Income Per Share -

Note 8 - Net Income Per Share - Computation of Basic and Diluted Net Income (Loss) Per Common Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Historical net income per share - Basic
Net income	$ 7,314,000	$ 9,465,000	$ 15,337,000	$ 17,123,000
Basic (in shares)	71,517,442	68,596,652	71,217,137	67,864,742
Basic net income per common share (in dollars per share)	$ 0.10	$ 0.14	$ 0.22	$ 0.25
Historical net income per share - Diluted
Net income	$ 7,314,000	$ 9,465,000	$ 15,337,000	$ 17,123,000
Weighted average number of common shares outstanding (in shares)	71,517,442	68,596,652	71,217,137	67,864,742
Effect of dilutive stock options (in shares)	3,961,207	4,076,502	4,037,911	5,230,902
Weighted average number of common shares outstanding (in shares)	75,478,649	72,673,154	75,255,048	73,095,644
Diluted net income per common share (in dollars per share)	$ 0.10	$ 0.13	$ 0.20	$ 0.23

Note 9 - Product Lines, Conce39

Note 9 - Product Lines, Concentration of Credit Risk and Significant Customers (Details Textual)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Pharmaceutical Wholesalers [Member] | Product Shipments [Member] | Customer One [Member]
Concentration Risk, Percentage			33.00%	38.00%
Pharmaceutical Wholesalers [Member] | Product Shipments [Member] | Customer Two [Member]
Concentration Risk, Percentage			20.00%	17.00%
Pharmaceutical Wholesalers [Member] | Product Shipments [Member] | Customer Three [Member]
Concentration Risk, Percentage			18.00%	15.00%
Pharmaceutical Wholesalers [Member] | Product Shipments [Member] | Customer Four [Member]
Concentration Risk, Percentage			15.00%	12.00%
Pharmaceutical Wholesalers [Member] | Product Shipments [Member]
Concentration Risk, Number of Customers			4	4
Pharmaceutical Wholesalers [Member] | Accounts Receivable [Member] | Customer One [Member]
Concentration Risk, Percentage			35.00%		26.00%
Pharmaceutical Wholesalers [Member] | Accounts Receivable [Member] | Customer Two [Member]
Concentration Risk, Percentage			20.00%		24.00%
Pharmaceutical Wholesalers [Member] | Accounts Receivable [Member] | Customer Three [Member]
Concentration Risk, Percentage			18.00%		23.00%
Pharmaceutical Wholesalers [Member] | Accounts Receivable [Member] | Customer Four [Member]
Concentration Risk, Percentage			12.00%		14.00%
Pharmaceutical Wholesalers [Member] | Accounts Receivable [Member]
Concentration Risk, Number of Customers			4		4
Number of Product Lines			2
Concentration Risk, Percentage	100.00%	100.00%	100.00%	100.00%

Note 9 - Product Lines, Conce40

Note 9 - Product Lines, Concentration of Credit Risk and Significant Customers - Summary of Net Revenue by Product Line and Percentages (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Subsys [Member]
Revenues	$ 76,700	$ 54,576	$ 147,240	$ 95,229
Dronabinol Sg Capsule [Member]
Revenues	933	1,120	1,163	2,103
Revenues	$ 77,633	$ 55,696	$ 148,403	$ 97,332

Note 9 - Product Lines, Conce41

Note 9 - Product Lines, Concentration of Credit Risk and Significant Customers - Percentage of Revenue by Route to Market (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Pharmaceutical Wholesalers [Member] | Sales Revenue, Product Line [Member] | Product Concentration Risk [Member]
Concentration Risk Percentage	99.00%	98.00%	99.00%	98.00%
Generic Pharmaceutical Distributor [Member] | Sales Revenue, Product Line [Member] | Product Concentration Risk [Member]
Concentration Risk Percentage	1.00%	2.00%	1.00%	2.00%
Concentration Risk Percentage	100.00%	100.00%	100.00%	100.00%

Note 10 - Related Party Trans42

Note 10 - Related Party Transactions (Details Textual)	1 Months Ended
	Mar. 31, 2015USD ($)
Board of Directors Chairman [Member]
Annual Consulting Fee	$ 300,000