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The healthcare sector has been the top performing group during the last six months with a 8.5% gain during that period.

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Based on this observation I screened for companies in the healthcare sector where at least one insider made a buy transaction during the September month. I wrote part I of an article titled "5 Healthcare Companies With Insider Buying During September 2012" on September 24. Here is a look at five additional stocks that I found.

1. Horizon Pharma (NASDAQ:HZNP) is a biopharmaceutical company that is developing and commercializing innovative medicines to target unmet therapeutic needs in arthritis, pain and inflammatory diseases.

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Insider buys

Financials

The company reported the second-quarter financial results on August 10, with the following highlights:

Revenue$3.8 million
Net loss$22.8 million
Cash$63.5 million

Horizon announced on September 25 the completion of an underwritten public offering of 24,638,750 units at a combined price to the public of $3.50 per unit. The net proceeds to Horizon from this offering were approximately $81 million.

Upcoming milestones

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The company is expecting decision on Duexis MAA in the fourth quarter of 2012. Duexis, a combination of the NSAID ibuprofen and the histamine H2-receptor antagonist famotidine, is indicated for the relief of signs and symptoms of rheumatoid arthritis and osteoarthritis and to decrease the risk of developing upper gastrointestinal ulcers in patients who are taking ibuprofen for those indications. Duexis is already approved in the U.S.

My analysis

The stock has a $2 price target from the Point and Figure chart. There have been four insider buy transactions and there has not been any insider sell transactions this year. If Duexis is to gain approval in the United Kingdom this year, I believe the stock could be trading in a $6-$7 range. If the drug is not approved, the stock could dip to $2.

2. AspenBio Pharma (NASDAQ:APPY) is an in vitro diagnostic company focused on the clinical development and commercialization of its lead product, AppyScore. AppyScore is a unique blood-based test with projected high sensitivity and negative predictive value that is designed to aid in the identification of patients at low risk for acute appendicitis, allowing for more conservative patient management. AppyScore is initially being developed for pediatric, adolescent and young adult patients with abdominal pain as this population is at the highest risk for appendicitis as well having the highest risk of the long-term health effects associated with CT imaging.

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Insider buys

  • Donald Hurd purchased 15,000 shares on September 21. Donald Hurd serves as Senior Vice President and Chief Commercial Officer.
  • Gail Schoettler purchased 2,500 shares on August 3 and currently holds 3,000 shares of the company. Ambassador Gail Schoettler has served on the board of AspenBio Pharma since August 2001. She sits on the audit committee and the nominating and governance committee of AspenBio Pharma. In October 2010, Ms. Schoettler became Non-Executive Chair of the board of AspenBio.
  • Stephen Lundy purchased 4,000 shares on June 29. Stephen Lundy was appointed to the positions of Chief Executive Officer and President on March 24, 2010. Effective on the same date, he was appointed to the company's Board of Directors. Mr. Lundy has more than 20 years of experience in drug and diagnostic product development and commercialization. He was Chief Executive Officer of MicroPhage from 2008 to 2010.
  • Jeffrey McGonegal CFO purchased 5,000 shares on June 28 and currently holds 13,622 shares of the company.
  • Gregory Pusey, a director and officer, purchased 2,000 shares on June 29 and currently holds 31,795 shares of the company.
  • Michael Merson purchased 1,000 shares on June 29 and currently holds 1,180 shares of the company. Mr. Merson is chair of the nominating and governance committee and sits on the audit committee of AspenBio Pharma.

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Financials

The company reported the second-quarter financial results on August 7, with the following highlights:

Revenue$0
Net loss$2.3 million
Cash$11.2 million

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News

On September 27 AspenBio provided its shareholders and the broader investment community with an update on its clinical and business activities. The company announced that it plans to initiate a pivotal study in the fourth quarter of 2012 for its blood-based appendicitis test designed to assist emergency room clinicians in ruling out acute appendicitis. The company is moving ahead with its plans following its recent productive meeting with the U.S. Food and Drug Administration [FDA]. In addition to seeking approval in the U.S., the company plans to obtain CE Mark before the end of the year and to introduce the product in Europe shortly thereafter.

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In addition to the company's clinical advancements, AspenBio announced that progress continues for its out-licensed animal health assets. To date, cumulative consideration achieved under the exclusive license agreement is approximately $1.3 million, including license fees and milestone payments.

Finally, the company outlined strategic changes designed to further position AspenBio for success. The board of directors is being restructured in alignment with the strategic focus of the company and certain board members have stepped down voluntarily from their positions. These board members are Greg Pusey, Doug Hepler, Mark Ratain and Michael Merson. AspenBio is in the process of identifying potential new board members with the desired skills, qualifications and experience to guide the company's refocused strategy, but ultimately intends to have a smaller sized board. Additionally, a rebranding of the company is underway and is expected to include the evaluation of new company and product names, as well as associated logos. The company intends to propose a new company name later this year and such change will require shareholder approval.

My analysis

There have been six insider buy transactions and there has not been any insider sell transactions this year. I believe the next milestone for the stock will be the CE marking of AppyScore anticipated later this year. If AppyScore receives the CE mark I believe the stock could be trading in a $3-$4 range. If AppyScore fails to receive the CE mark the stock could fall to $2 or even below.

3. Cleveland BioLabs (NASDAQ:CBLI) is a clinical-stage biotechnology company leveraging deep mechanistic understanding of the cell death process, apoptosis, to develop a robust pipeline of compounds primarily focused on oncology applications and mitigation of radiation injury. The company's lead compound is being developed as both a radiation countermeasure and a cancer treatment. The company has two operating subsidiaries, Incuron and Panacela Labs and strategic relationships with the Cleveland Clinic, Roswell Park Cancer Institute, the Children's Cancer Institute Australia and the Armed Forces Radiobiology Research Institute.

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Insider buys

  • James Antal purchased 2,316 shares on September 21 and 5,300 shares on March 16 - June 15. James Antal currently holds 27,258 shares of the company. Mr. Antal has served as one of the company's directors since July 2006.
  • David Hohn purchased 1,000 shares on July 2, 1,000 shares on April 4 and 1,000 shares on January 4 pursuant to a Rule 10b5-1 trading plan adopted by the reporting person on August 18, 2011. David Hohn currently holds 9,584 shares of the company.

Financials

The company reported the second-quarter financial results on August 6, with the following highlights:

Revenue$0.3 million
Net loss$5.1 million
Cash$22.0 million

Upcoming milestones

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  • Enrollment of the CBLB502 advanced cancer trial at Roswell Park Cancer Institute continues. To date, no serious adverse events were reported.
  • The company conducted several meetings with federal funding agencies during the second quarter to provide updates on progress with the CBLB502 radiation countermeasure program. Submissions to the FDA are being completed in preparation for an upcoming meeting with a view towards finalizing the requirements for remaining pivotal animal and human studies.
  • Incuron one of Cleveland BioLabs' majority-owned subsidiaries, announced several advancements with oncology drug candidate CBL0137 during the second quarter. New studies demonstrating potentially curative effects of CBL0137, in combination with chemotherapy in animal models of neuroblastoma were presented at the Advances in Neuroblastoma Research Association 2012 meeting. A study demonstrating that CBL0137 counteracts tumor formation in a spontaneous breast cancer model in mice was published online in Cancer Prevention Research, a peer-reviewed publication of the American Association for Cancer Research. A meeting was recently conducted with the FDA regarding an IND application for the intravenous administration of CBL0137 in the United States.
  • Incuron's ongoing Phase I single-dose ascending trial of CBLC102 in refractory advanced cancer patients with liver metastases is expected to complete its fifth cohort shortly. Depending on reports of dose limiting toxicities, it is anticipated that the trial will continue into one additional dose-ascension cohort before adding patients at the selected therapeutic dose.
  • In Q2 2012 Panacela Labs continued toxicology work in Russia for its five pipeline candidates with a view towards potential IND filings.

My analysis

The stock has a $4.5 price target from the Point and Figure chart. There have been five insider buy transactions and there has been one insider sell transaction this year. There are some catalysts pending for 2012 and 2013. The 200 day moving average is currently at $2.24 which could act like a support for the stock.

4. MGC Diagnostics Corporation (NASDAQ:MGCD), (formerly Angeion Corporation), is a global medical technology company dedicated to CardioRespiratory health solutions. MGC Diagnostics develops, manufactures and markets non-invasive diagnostic systems. This portfolio of products provide solutions for disease detection, integrated care, and wellness across the spectrum of CardioRespiratory healthcare. The company's products are sold internationally through distributors and in the United States through a direct sales force targeting heart and lung specialists located in hospitals, university-based medical centers, medical clinics, physicians' offices, pharmaceutical companies, medical device manufacturers, and clinical research organizations [CROs].

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Insider buys

  • Hendrik Struik purchased 2,500 shares on September 21-26. Hendrik Struik serves as a director of the company.
  • Robert Munzenrider purchased 7,200 shares on June 13 and currently holds 31,235 shares of the company. Robert Munzenrider serves as a director of the company.
  • Gregg Lehman purchased 3,400 shares on June 13 and currently holds 48,478 shares of the company. Gregg Lehman serves as a Director, Chief Executive Officer and President of the company.

Financials

The company reported the third-quarter fiscal year 2012, which ended July 31, financial results on August 30, with the following highlights:

Revenue$6.9 million
Net loss$0.1 million
Cash$8.7 million

My analysis

The stock has a $7.5 price target from the Point and Figure chart. There have been five insider buy transactions and there has not been any insider sell transactions this year. The 200 day moving average is currently at $5.59 which could act like a support for the stock.

5. Progenics Pharmaceuticals (NASDAQ:PGNX) is a biopharmaceutical company dedicated to developing innovative medicines to treat disease, with a focus on cancer and related conditions. Progenics' pipeline candidates include PSMA ADC, a human monoclonal antibody-drug conjugate in phase 1 testing for treatment of prostate cancer, and preclinical stage novel multiplex phosphoinositide 3-kinase (PI3K) inhibitors for the treatment of cancer. Progenics has exclusively licensed development and commercialization rights for its first commercial product, Relistor, to Salix Pharmaceuticals (NASDAQ:SLXP) for markets worldwide other than Japan, where Ono Pharmaceutical, holds an exclusive license for the subcutaneous formulation. Relistor (methylnaltrexone bromide) subcutaneous injection is a first-in-class treatment for opioid-induced constipation approved in more than 50 countries for patients with advanced illness.

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Insider buys

Mark Baker has purchased 4,832 shares during January 11 - September 26 pursuant to a 10b5-1 trading plan. Mark Baker currently holds 43,677 shares of the company. Mr. Baker joined Progenics in 2005 as senior vice president and general counsel and secretary, and has since served as executive vice president, president, and was appointed to the board of directors. Mr. Baker serves currently as Chief Executive Officer of the company.

Financials

The company reported the second-quarter financial results on August 9, with the following highlights:

Revenue$1.8 million
Net loss$10.7 million
Cash$51.1 million
Debt$0
Net cash$51.1 million
Shares outstanding33.8 million
Net cash per share$1.51

Progenics Pharmaceuticals announced on September 20 a companywide restructuring, including a reduction of its workforce. The company will continue to focus its resources and efforts on its oncology programs, particularly an upcoming phase 2 study of PSMA ADC in prostate cancer patients.

Progenics provided these additional details:

  • Annual cash expenditures will be reduced by an estimated $8 million after restructuring and severance costs. Headcount was reduced by 26% to 77 employees.
  • The company is terminating several early stage research projects. Preclinical research will continue in the company's PI3K program.
  • Clinical development and manufacturing capabilities are unaffected by the reduction.
  • Chief Financial Officer Robert McKinney and Senior Vice President of Quality Benedict Osorio are stepping down, effective September 30. Senior Executive Director and Treasurer Angelo Lovallo will become Principal Financial Officer and Principal Accounting Officer.
  • This workforce reduction reflects termination of the early stage research, last year's out-licensing of Relistor to Salix Pharmaceuticals, and planned divestitures of the previously discontinued PRO 140 and C. difficile programs.
  • These actions follow the U.S. Food and Drug Administration's issuance of a Complete Response Letter related to a Supplemental New Drug Application for use of subcutaneous Relistor in patients with chronic, non-cancer pain. Under the terms of its agreement with partner Salix Pharmaceuticals, Progenics is entitled to a $40 million milestone upon regulatory approval of Relistor for this indication.

Upcoming milestones

Progenics announced on September 28 that it has opened enrollment in a phase 2 study in prostate cancer patients of its PSMA ADC compound. PSMA ADC is a targeted anti-cancer therapeutic that uses a monoclonal antibody to deliver a cell-killing drug to malignant cells.

The phase 2 trial is an open-label, multicenter study to assess the anti-tumor activity and tolerability of PSMA ADC in up to 75 subjects with metastatic castration-resistant prostate cancer. Patients will receive a total of eight doses of drug at 2.5 mg/kg. The study endpoints evaluate responses in prostate specific antigen [PSA]; circulating tumor cells [CTC]; bone, visceral and nodal metastases; and pain. Safety also will be assessed.

PSMA ADC is a novel compound designed to deliver a cell-killing drug selectively to prostate cancer cells by targeting prostate specific membrane antigen [PSMA], a validated biomarker of prostate cancer that is expressed on the surface of those cells (as well as on blood vessels supplying other solid tumors). PSMA ADC consists of a fully human monoclonal antibody, which binds PSMA, linked to a cytotoxic drug, monomethyl auristatin E [MMAE], which inhibits cell proliferation by disrupting the cellular "backbone" required for replication. The antibody-drug conjugate is designed to be absorbed by the cell and release active anti-cancer drug, thereby destroying the malignant cell.

Phase 1 clinical trial data will be presented at the EORTC-NCI-AACR Symposium on Molecular Targets and Cancer Therapeutics to be held November 6-9 in Dublin, Ireland. Progenics previously presented positive preliminary phase 1 data at the annual meeting of the American Society of Clinical Oncology [ASCO]. Robust antitumor activity was observed across a range of doses, and durable responses were seen in heavily pre-treated patients. Doses up to and including 2.5 mg/kg were generally well tolerated. Dose limiting toxicities, primarily neutropenia, were seen at 2.8 mg/kg.

My analysis

There have been 10 insider buy transactions and eight insider sell transactions this year. There are some catalysts pending for 2012 and 2013. The stock has been in a free fall since the Complete Response Letter received in July. I would only take a very small position in the stock currently. I would expect the net cash of $1.51 per share to act like a support for the stock.

Source: 5 Healthcare Companies With Insider Buying During September 2012 - Part II