Insiders Are Buying Mirati Therapeutics

Oct.30.13 | About: Mirati Therapeutics, (MRTX)

In this article, I will feature one biotech that has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:

  1. The stock is purchased by three or more insiders within one month.
  2. The stock is sold by no insiders in the month of intensive purchasing.
  3. At least two purchasers increase their holdings by more than 10%.

Mirati Therapeutics (NASDAQ:MRTX) engages in the development of therapeutics for the cancer treatment.

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Insider buying during the last 30 days

Here is a table of Mirati Therapeutics' insider-trading activity during the last 30 days by insider.

Name Title Trade Date Shares Purchased Public Offering Current Ownership Increase In Shares
Felix Baker 10% Owner Oct 24 400,000 Yes 2,380,074 shares +20.2%
Tang Capital Partners 10% Owner Oct 24 57,143 Yes 1,238,543 shares +4.8%
Boxer Capital 10% Owner Oct 24 400,000 Yes 2,380,074 shares +20.2%
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There have been 857,143 shares purchased by insiders during the last 30 days.

Financials

Mirati Therapeutics reported the second-quarter financial results on August 12 with the following highlights:

Revenue $0
Net loss $8.0 million
Cash $20.6 million
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On October 23 Mirati announced the pricing of an underwritten public offering of 3,250,000 shares of its common stock at a price to the public of $17.50 per share. The gross proceeds from this offering to Mirati are expected to be approximately $56.9 million.

Pipeline and upcoming milestones

Mirati's lead program in clinical development is MGCD265, a multi-targeted small molecule kinase inhibitor for treatment of oncology patients with solid tumors. Mirati is also evaluating development opportunities in oncology for mocetinostat, a spectrum-selective HDAC inhibitor and MGCD516, a kinase inhibitor with a distinct target profile. The upcoming milestones for these programs are summarized in the following picture.

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Competition

In the oncology market, Mirati's major competitors include: Amgen (NASDAQ:AMGN); ArQule (NASDAQ:ARQL) and its partners Kyowa Hakko Kirin Pharma Inc. and Daiichi Sankyo Company (OTCPK:DSKYF); Aveo Pharmaceuticals (NASDAQ:AVEO); Bristol-Myers Squibb Company (NYSE:BMY); Exelixis (NASDAQ:EXEL); F. Hoffman-LaRoche (OTCQX:RHHBY); GlaxoSmithKline (NYSE:GSK); Novartis (NYSE:NVS); and Pfizer (NYSE:PFE).

Here is a table of these competitors' insider-trading activities this year.

Company Insider buying / shares Insider selling / shares
AMGN 0 131,149
ARQL 0 0
AVEO 56,489 6,429
BMY 0 2,587,814
EXEL 10,000 0
PFE 0 1,122,868
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Only Mirati has seen intensive insider buying during the past 30 days.

Conclusion

There have been three different insiders buying Mirati and there have not been any insiders selling Mirati during the last 30 days. Two of these three insiders increased their holdings by more than 10%.

There are three analyst buy ratings, zero neutral ratings, and zero sell ratings with an average price target of $21.08. Mirati does not have any near-term data readouts scheduled. I believe the stock could be a good long-term investment based on the intensive insider buying.

Disclosure: I am long EXEL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.