Insiders bought and sold $97 million of stock in the healthcare sector last week, accounting for 5.7% of the total of $1.70 billion worth of stocks traded (including $1.52 billion sold and $0.18 billion bought) via almost 1,800 separate insider transactions last week. We culled through those 1,800 or so insider buys and sells in over 850 different companies (based on last week’s SEC Forms 3, 4, and 5 filings), as part of our weekly coverage of insider trades, and present here the most notable trades in the healthcare sector last week:
Boston Scientific Corp. (BSX): BSX is a developer of medical devices used in cardiology, endoscopy, oncology, neuromodulation and other interventional procedures. Insiders currently hold 79.5 million shares or 5.3% of outstanding shares. During the past week, three Directors bought a total of 118,000 shares for $0.64 million. This includes Director Ernest Mario who bought 100,000 shares, and as we reported in our prior coverage of insider trades in the healthcare sector, bought 25,000 shares just last week, and another 50,000 shares three weeks prior to that. Mr. Mario has been a Director of BSX since 2001. He is the former Chief Executive of Glaxo Holdings Plc and a number of other pharmaceutical companies, and also former Chairman of the Board of the Duke University Health System. Overall, insiders purchased a total of only 375,600 shares in the past year, so the recent purchases by Mr. Mario and other directors represent a strong pick-up in insider buying. This is also significant given that BSX shares are trading near all-time lows and almost 90% below the $46 high hit in early 2004, so the insider buying is a strong sign of confidence in the long-term outlook for BSX.
Zimmer Holdings Inc. (ZMH): ZMH develops orthopaedic and dental reconstructive implants, and fracture management products. Insiders currently hold 0.4 million shares or 0.2% of outstanding shares. During the last week, CEO David Dvorak exercised options and sold the resulting 27,044 shares for $1.4 million under an automated 10b5-1 plan, ending the week with 85,256 shares. This is significant due to its size, in that the shares represent a significant portion of Mr. Dvorak’s holdings in the company, and given that insiders sold only a total of 165,240 shares over the past year.
Incyte Corporation (INCY): INCY develops small molecule drugs for hematologic and oncology indications, and inflammatory and autoimmune diseases. Insiders currently hold 2.3 million or 1.8% of outstanding shares. During the past week, Director Baker, on behalf of Baker Bros. Life Science Capital, bought 2.5 million shares for $32.2 million. Mr. Baker has served as Director of Trimeris since 2004, and he is also a director at Neurogen Corp., Ardea Biosciences Inc. (RDEA) and Seattle Genetics Inc. (SGEN). He is also the managing member of Baker Bros. Advisors that manages the Baker Bros. Life Sciences Capital Fund that is focused solely on life science companies.
Resmed Inc. (RMD): RMD develops medical equipment to treat, diagnose and manage sleep-disordered breathing including obstructive sleep apnea. Insiders currently hold 1.8 million or 1.2% of outstanding shares. During the past week, three insiders (two Presidents and a Director) sold a total of 89,195 shares (all regular sales) for $2.3 million, all but 9,196 of which were under 10b5-1 plans. Insiders have been very active recently, selling a total of 158,755 shares in November, and the recent selling is a huge pick-up considering that they sold no additional shares during the prior two months.
Pharmacyclics Inc. (PCYC): PCYC develops small molecule drugs to treat cancer by disrupting the biochemical pathways in cancer cells. It has products in phase 2 development for leukemia and pancreatic cancer. Insiders currently hold 13.6 million or 20.0% of outstanding shares. During the past week, Institutional insider Baker Bros. Life Sciences Capital (see description above under Incyte), by virtue of holding over 10% of company stock, bought 0.45 million shares for $6.3 million, ending the week with 7.9 million or 11.5% of outstanding shares.
Merge Healthcare Inc. (MRGE): MRGE develops medical imaging, clinical workflow process, and patient information management software applications. The medical imaging software solutions support end-to-end business and clinical workflow for radiology department and specialty practices, imaging centers and hospitals. The patient information management software applications improve their customers' productivity and enhance the quality of the patient experience. Insiders currently hold 34.1 million or 41.0% of outstanding shares. During the past week, Chairman Michael Ferro bought 233,500 shares for $1.1 million, ending the week with 31.6 million or 34.9% of outstanding shares. Mr. Ferro is the past Chairman, CEO and founder of Click Commerce, and is credited by many to be the “Father of the Extranet.”
Onyx Pharmaceuticals Inc. (ONXX): ONXX develops small molecule drugs designed to prevent cancer cell proliferation and angiogenesis. Insiders currently hold 0.6 million or 1.0% of outstanding shares. During the past week, VP of Public Affairs Julianna Wood sold 107,053 shares for $4.8 million (under 10b5-1 plan), ending the week with 16,397 shares. Besides being a large sale, the transaction is significant also because it represents most of Ms. Wood’s holdings in the company, and also because it is a significant pick-up in selling given that insiders sold only an additional 105,982 shares over the prior 51 weeks of the past year. ONXX shares are trading near almost four-year highs, up recently on optimism over its NDA for carfilzomib for relapsed and refractory multiple myeloma.
Disclaimer: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our ‘opinions’ and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.