- 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.
Insider selling during the last 30 days
Here is a table of Intercept's insider activity during the last 30 days.
|Name||Title||Trade Date||Shares Sold||Rule 10b5-1||Current Ownership||Decrease In Ownership|
|David Shapiro||CMO||Mar 17-Apr 2||9,849||Yes||25,037 shares||28.2%|
|Luciano Adorini||CSO||March 7||2,000||Yes||6,392 shares + 4,000 options||16.1%|
|Daniel Regan||CCO||March 5||20,000||Yes||0 shares + 110,000 options||15.4%|
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.
|Month||Insider selling / shares||Insider buying / shares|
There have been 2,060,184 shares sold, and there have been zero shares purchased by insiders since January 2013.
Intercept reported the full-year 2013 financial results on March 14 with the following highlights:
|Net loss||$67.8 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.
Intercept has the following upcoming milestones:
|PBC Program||Phase 3 confirmatory trial planned to be initiated||Q3/2014|
|PBC Program||NDA and MAA Filings for OCA in PBC anticipated||end of 2014|
|FLINT trial in NASH||Final results||July 2014|
|FLINT trial in NASH||Phase 3 program anticipated to begin||H1/2015|
|NASH Program||Phase 2 DSP NASH trial results||Q4/2015|
|NASH Program||Phase 2 lipid metabolism trial||H2/2014|
|Portal Hypertension Program||Additional data from POISE trial||April 9-13|
|Bile Acid Diarrhea Program||Proof of concept trial data to be presented at DDW 2014||2014|
|PSC Program||Double-blind Phase 2 trial planned to be initiated in Primary Sclerosing Cholangitis (PSC)||H2/2014|
|INT-767 Program||Phase 1 trial for INT-767 planned to be initiated||Q4/2014|
|Qtrly Rev Growth (yoy):||0.00||0.21||N/A||-0.08|
|PEG (5 yr expected):||N/A||0.58||N/A||N/A|
Intercept doesn't have any approved products yet.
Here is a table of these competitors' insider activities this year.
|Company||Insider buying / shares||Insider selling / shares|
Gilead Sciences has also seen intensive insider selling during the last 30 days.
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.
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.