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In this article, I will feature one biotech stock 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 increased their holdings by more than 10%.

Synta Pharmaceuticals (NASDAQ:SNTA) focuses on the discovery, development, and commercialization of small molecule drugs for treating severe medical conditions, including cancer and chronic inflammatory diseases.

(click to enlarge)

Insider buying during the last 30 days

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

NameTitleTrade DateShares PurchasedPublic OfferingCurrent OwnershipIncrease In Shares
Safi BahcallCEONov 1320,000Yes2,053,135 shares+1.0%
William ReardonDirectorNov 1313,333Yes36,561 shares+57.4%
Keith GollustDirectorNov 13150,000Yes3,330,638 shares+4.7%
Bruce KovnerDirectorNov 135,000,000Yes28,641,849 shares+21.1%

There have been 5,183,333 shares purchased by insiders during the last 30 days.

Insider buying by calendar month

Here is a table of Synta's insider-trading activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
November 20135,183,3330
October 201300
September 201300
August 201300
July 201300
June 20133,170,0000
May 201300
April 201300
March 201300
February 201300
January 201300

There have been 8,353,333 shares purchased and there have been zero shares sold by insiders this year. The month of November has seen the most insider buying.

Financials

Synta reported the third-quarter financial results on November 4 with the following highlights:

Revenue$0
Net loss$22.5 million
Cash$53.4 million
Debt$23.5 million

On November 13, 2013, Synta priced a public offering of 14,000,000 shares of its common stock at a price to the public of $3.75 per share. Gross proceeds to Synta are expected to be approximately $52.5 million.

Pipeline and upcoming catalysts

Synta has the following upcoming catalysts:

TrialCatalyst
GALAXY-1Overall survival results by early 2014.
GALAXY-2Interim analyses in H2/2014, final analysis in H1/2015.
ENCHANT-1Initial results in December 2013.

(click to enlarge)

(Source: Synta)

Competition

Synta's competitors include Infinity Pharmaceuticals (NASDAQ:INFI), Curis (NASDAQ:CRIS), and Exelixis (NASDAQ:EXEL). Here is a table comparing these companies.

CompanySNTAINFICRISEXEL
Market Cap:292.06M689.98M237.16M974.44M
Employees:12415433174
Revenue:N/AN/A15.16M34.81M
EBITDA:-74.05M-138.80M-8.18M-170.83M
Net Income:-76.63M-140.84M-20.50M-226.21M
P/S:N/AN/A15.9228.26

Synta doesn't have any revenues yet.

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

CompanyInsider buying / sharesInsider selling / shares
INFI05,781,169
CRIS90,000481,852
EXEL10,0000

Only Synta has seen intensive insider buying during the last 30 days.

Conclusion

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

On October 26, 2013, Synta announced one-year follow-up results from the GALAXY-1 Phase 2b/3 trial. The stock plunged after the results due to improved performance by the control arm.

The insiders purchased their shares after the GALAXY-1 trial results at $3.75 share price pursuant to the public offering. The next catalyst for the stock will be the initial results from the ENCHANT-1 trial, which will be presented at the San Antonio Breast Cancer Symposium in December of this year.

There are five analyst buy ratings, three neutral ratings, and zero sell ratings with an average price target of $15.83. I believe the stock could be a good speculative pick from the current price level based on the intensive insider buying.

Source: Insiders Are Buying Synta Pharmaceuticals