Sangamo BioSciences (NASDAQ:SGMO) focuses on the research, development, and commercialization of zinc finger DNA-binding proteins (ZFPs) for gene regulation and gene modification in the United States.
Insider selling during the last 30 days
Here is a table of Sangamo BioSciences' insider activity during the last 30 days.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|Dale Ando||VP||March 26||15,000||Yes||97,015 shares + 144,000 options||5.9%|
|Philip Gregory||SVP||March 21||15,000||Yes||109,347 shares + 289,500 options||3.6%|
|Saira Ramasastry||Director||March 17||10,000||Yes||0 shares + 40,000 options||20.0%|
|Steven Mento||Director||March 14||6,103||Yes||23,563 shares||20.6%|
|Edward Lanphier||CEO||March 17||50,000||Yes||1,986,054 shares||2.5%|
|Ward Wolff||CFO||March 10||10,000||Yes||227,347 shares + 182,000 options||2.4%|
There have been 106,103 shares sold by insiders during the last 30 days. All these shares were sold pursuant to a Rule 10b5-1 plan.
SEC Rule 10b5-1 is a regulation enacted by the United States Securities and Exchange Commission (SEC) in 2000. The SEC states that Rule 10b5-1 was enacted in order to resolve an unsettled issue over the definition of insider trading, which is prohibited by SEC Rule 10b-5. After Rule 10b5-1 was enacted, the SEC staff publicly took the position that canceling a planned trade made under the safe harbor does not constitute insider trading, even if the person was aware of the inside information when canceling the trade. This staff interpretation raises the possibility that executives can exploit this safe harbor by entering into 10b5-1 trading plans before they have inside information while retaining the option to later cancel those plans based on inside information.
For example, a CEO of a company could call a broker on January 1 and enter into a plan to sell a particular quantity of shares of his company's stock on March 1, find out terrible news about his company on February 1 that will not become public until April 1, and then go forward with the March 1 sale anyway, saving himself from losing money when the bad news becomes public. Under the terms of Rule 10b5-1(b) this is insider trading because the CEO "was aware" of the inside information when he made the trade. But he can assert an affirmative defense under Rule 10b5-1(c), because he planned the trade before he learned the inside information.
In general, it is a safer way for an insider to sell shares pursuant to a Rule 10b5-1 trading plan than without it.
Insider selling by calendar month
Here is a table of Sangamo BioSciences' insider activity by calendar month.
|Month||Insider selling / shares||Insider buying / shares|
There have been 946,504 shares sold, and there have been zero shares purchased by insiders since January 2013. The month of February 2014 has seen the most insider selling.
Sangamo BioSciences reported the full-year 2013 financial results on February 11 with the following highlights:
|Net loss||$26.6 million|
The six insiders sold their shares after these results.
On March 26, Sangamo BioSciences closed a $100 million financing.
Sangamo BioSciences' 2014 guidance is as follows:
|Operating expenses||$65-$70 million|
Pipeline and upcoming milestones
Sangamo BioSciences' pipeline consists of the following candidates.
(Source: Sangamo BioSciences)
Sangamo BioSciences' upcoming milestones include the following.
(Source: Investor presentation)
Sangamo BioSciences' competitors (according to the 2013 annual report) include Amgen (NASDAQ:AMGN), Bluebird Bio (NASDAQ:BLUE), and Isis Pharmaceuticals (ISIS). Here is a table comparing these companies.
|Qtrly Rev Growth (yoy):||-0.23||0.13||73.53||1.13|
|PEG (5 yr expected):||N/A||2.15||1.25||-2.73|
Sangamo BioSciences has the second-highest insider ownership among these four companies.
Here is a table of these competitors' insider activities this year.
|Company||Insider buying / shares||Insider selling / shares|
Only Sangamo BioSciences has seen intensive insider selling during the last 30 days.
There have been six different insiders selling Sangamo BioSciences, and there have not been any insiders buying Sangamo BioSciences during the last 30 days. Two of these six insiders decreased their holdings by more than 10%. Sangamo BioSciences has an insider ownership of 4.30%.
Sangamo BioSciences has a $9 price target from the Point & Figure chart. I believe there is an opportunity for a short entry with the $9 price target. I would place a stop loss at $25, which is the 13-year high. The two main reasons for the proposed short entry are a bearish Point & Figure chart, and the intensive insider-selling activity.
Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in SGMO over the next 72 hours. 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.