We present here three noteworthy buys and two noteworthy sells from Wednesday, Thursday and Friday's SEC Form 4 (insider trading) filings in the healthcare sector, as part of our daily and weekly coverage of insider trades (the basic materials and energy sectors, technology sector, and consumer and retail sectors were covered in separate articles, hyperlinked above).
These were selected by a review of over 790 separate transactions in over 450 different companies filed by insiders on Wednesday and Thursday, and an additional 200 or so filings so far today. The filings are noteworthy based on the dollar amount sold, the number of insiders buying or selling, and based on whether the overall buying or selling represents a strong pick-up based on historical buying and selling in the stock:
Alnylam Pharmaceuticals (ALNY): ALNY is a clinical-stage biotech company focused on developing novel therapeutics based on RNA interference or RNAi technology. Its lead product is in phase 2 trials for respiratory syncytial virus infection or RSV, a leading cause of pediatric hospitalizations in the U.S. On Thursday, six insiders filed SEC Forms 4 indicating that they purchased 120,696 shares for $1.3 million, in connection with the recent 7.5 million share public offering of the company's common stock just over a week ago. The majority of the shares were purchased by Director Paul Schimmel (93,023 shares) and Director Marsha Fanucci (10,000 shares). In comparison, insiders purchased a total of 0.13 million shares in the past year.
The company proposes to use the proceeds from the offering to push forward its ALN-TTR02 and ALN-PPC drugs for the treatment of transthyretin-mediated amyloidosis and severe hypercholesterolemia respectively. It seems so far that insider confidence and enthusiasm in purchasing shares in the offering was well-placed, as the shares-- after initially dipping on the news-- are now back up to the highs rising over 20% from the lows following the news.
Gilead Sciences Inc. (GILD): Gilead is a developer of therapeutics to treat viral, fungal, respiratory and cardiovascular diseases. On Thursday, Director Olsen Per Wold filed SEC Form 4 indicating that he purchased 10,000 shares for $0.44 million, ending with 26,097 shares after the purchase. The last time insiders purchased GILD shares was a 12,800 share purchase almost two years ago, in May of 2010.
GILD shares have been extremely volatile in February, in what amounted to a market-cap gain of $5 billion in the early part of February, followed by a massive near $8 billion market-cap loss in the last five trading days. First, at the beginning of the month, on February 3rd, GILD shares shot up almost 15% after the company reported new preliminary data on its lead hepatitis C drug on that were encouraging, with the company disclosing that all genotype 1 hepatitis C patients treated with the experimental drug and ribavirin had no detectable signs of the virus after four weeks of the treatment.
Last Friday, GILD announced that six of eight patients for which data was available experienced viral relapse within four weeks of completing the hepatitis C treatment, which sent shares plummeting as much as 20% in the next few days, and leading many to question regarding its $11 billion buyout of Pharmasset last year. GILD shares currently trade at a discount 10-11 forward P/E and 4.9 P/B, compared to averages of 22.2 and 11.3 for its peers in the biotech group.
Ariad Pharmaceuticals Inc. (ARIA): ARIA is engaged in the development of drugs that treat aggressive and advanced-stage cancer by regulating cell signaling with small molecules. It is also developing small-molecule drugs that block signal transduction pathways in cells responsible for osteoporosis and immune and inflammatory diseases. On Thursday and Friday, three insiders filed SEC Forms 4 indicating that they sold exercised options to acquire 56,400 shares and sold those and an additional 12,300 shares for $1.0 million, pursuant to 10b5-1 plans, with the majority of the sales by SVP David Berstein (39,200 shares) and SVP Pierre Dodion (25,000 shares). This is in addition to the sale of 88,936 shares that we reported just a week ago, so that insiders have reported selling a total of 0.16 million shares in the last few trading days.
In comparison, insiders sold only an additional 55,000 shares in the past year. ARIA shares closed this week at $15.06, hitting eleven-year highs and up more than 100% from the lows in October of last year, bolstered by recent broker upgrades based on the potential of its ponatinib treatment and other drugs in its pipeline.
Threshold Pharmaceuticals Inc. (THLD): THLD is a biotech company focused on the discovery and development of therapeutics based on tumor hypoxia, a powerful scientific platform that offers broad potential to treat most solid tumors, based on the realization that tumors thrive in areas with low levels of oxygen, or hypoxic regions. On Thursday, leading private equity and venture capital firm Frazier Healthcare Ventures' Frazier Healthcare VI, L.P. fund or "FH VI", an insider by virtue of being a 10% owner of THLD, filed SEC Form 4 indicating that it sold 4.58 million shares that it held directly for $26.1 million. FH VI earlier in the month indicated via a 13G/A filing that it held 6.53 million or 12.8% of outstanding shares at the end of last year.
THLD shares have rallied five-fold in the last three-plus weeks, after the company announced on February 3rd a global agreement with Merck KGaA to co-develop and commercialize phase 3 hypoxia-targeted drug TH-302. The agreement gave THLD $25 million upfront, plus further potential milestone and royalty payments, including up to $35 million in additional development milestones during 2012. The total milestone payments under the agreement amount to $525 million, including $280 million in regulatory and development milestones and $245 million in sales-based milestones, a massive boost to the company's $60-$65 million market-cap before the agreement.
Boston Scientific Corp. (BSX): BSX is a developer of medical devices used in cardiology, endoscopy, oncology, neuromodulation and other interventional procedures. On Wednesday and Thursday, Director Mario Ernest purchased 30,000 shares for $0.18 million, increasing his holdings to 437,304 shares in direct and 21,300 shares in indirect holdings. In comparison, insiders purchased a total of 0.3 million shares in the past year.
BSX reported a disappointing Q4 at the beginning of the month, on February 2nd, missing on revenue and earnings and guiding FY earnings lower. The stock was initially weak after the Q4 report, but has since strengthened and broke out of a consolidation base on good volume on Friday, probably due to its cheap valuation and given rumors that emerged shortly thereafter of a possible private equity take-out of the company, most likely at higher prices. The stock, currently off more than 85% from its 2004 highs near $46, trades at a 13 forward P/E and 0.8 P/B compared to averages of 29.3 and 3.9 for its peers in the medical products group.
Credit: Fundamental data in this article were based on SEC filings, Zacks Investment Research, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
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