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Summary

  • Three insiders sold Intercept stock within one month.
  • The stock was not purchased by any insiders in the month of intensive selling.
  • All three of these insiders decreased their holdings by more than 10%.

Intercept Pharmaceuticals (NASDAQ:ICPT) focuses on the development and commercialization of novel therapeutics to treat chronic liver diseases utilizing its proprietary bile acid chemistry.

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Insider selling during the last 30 days

Here is a table of Intercept's insider activity during the last 30 days.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
David ShapiroCMOMar 17-Apr 29,849Yes25,037 shares28.2%
Luciano AdoriniCSOMarch 72,000Yes6,392 shares + 4,000 options16.1%
Daniel ReganCCOMarch 520,000Yes0 shares + 110,000 options15.4%

There have been 31,849 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 Intercept's insider activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
April 20145,3930
March 201426,4560
February 201415,5480
January 201427,2760
December 20135,2760
November 20136,8920
October 20131,672,0630
September 201340,1000
August 201329,0290
July 201393,8690
June 201395,0910
May 201339,4410
April 20133,7500
March 201300
February 201300
January 201300

There have been 2,060,184 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Intercept reported the full-year 2013 financial results on March 14 with the following highlights:

Revenue$1.6 million
Net loss$67.8 million
Cash$144.8 million

One of these three insiders sold their shares after these results.

On April 3, Intercept announced the pricing of a $183.3 million public offering.

Pipeline and upcoming milestones

Intercept's pipeline consists of the following product candidates.

(Source: Intercept)

Intercept has the following upcoming milestones:

ProgramMilestoneTiming
PBC ProgramPhase 3 confirmatory trial planned to be initiatedQ3/2014
PBC ProgramNDA and MAA Filings for OCA in PBC anticipatedend of 2014
FLINT trial in NASHFinal resultsJuly 2014
FLINT trial in NASHPhase 3 program anticipated to beginH1/2015
NASH ProgramPhase 2 DSP NASH trial resultsQ4/2015
NASH ProgramPhase 2 lipid metabolism trialH2/2014
Portal Hypertension ProgramAdditional data from POISE trialApril 9-13
Bile Acid Diarrhea ProgramProof of concept trial data to be presented at DDW 20142014
PSC ProgramDouble-blind Phase 2 trial planned to be initiated in Primary Sclerosing Cholangitis (PSC)H2/2014
INT-767 ProgramPhase 1 trial for INT-767 planned to be initiatedQ4/2014

Competition

Intercept's competitors include Gilead Sciences (NASDAQ:GILD), Raptor Pharmaceutical Corp. (NASDAQ:RPTP), and Genfit SA (OTCPK:GNFTF). Here is a table comparing these companies.

CompanyICPTGILDRPTPGNFTF
Market Cap:5.82B111.57B553.56M830.72M
Employees:506,1007078
Qtrly Rev Growth (yoy):0.000.21N/A-0.08
Revenue:1.62M11.20B16.87M7.53M
Gross Margin:1.000.740.90N/A
EBITDA:-39.35M4.87B-51.47M-12.87M
Operating Margin:-24.330.40-3.08-1.79
Net Income:-67.79M3.07B-69.42M-16.38M
EPS:-3.761.81-1.20-0.84
P/E:N/A40.07N/AN/A
PEG (5 yr expected):N/A0.58N/AN/A
P/S:3,873.5310.1633.96110.33

Intercept doesn't have any approved products yet.

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

CompanyInsider buying / sharesInsider selling / shares
GILD01,507,192
RPTP0182,567
GNFTFN/AN/A

Gilead Sciences has also seen intensive insider selling during the last 30 days.

Conclusion

There have been three different insiders selling Intercept, and there have not been any insiders buying Intercept during the last 30 days. All three of these insiders decreased their holdings by more than 10%. Intercept has an insider ownership of 32.90%.

Intercept has a $244 price target from the Point & Figure chart. I believe there is an opportunity for a short entry with the $244 price target. I would place a stop loss at $497, which is the all-time high. The two main reasons for the proposed short entry are a bearish Point & Figure chart, and the intensive insider-selling activity.

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Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in ICPT 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.

Source: Intercept Pharmaceuticals: 3 Different Insiders Have Sold Shares During The Last 30 Days