The healthcare sector has been the top performing group during the last six months, with a 6.6% gain during that period.
Based on this observation I screened for companies in the healthcare sector where at least one insider made a buy transaction during the November month. I wrote the part I on November 5, and the part II on November 7, of an article series titled "5 Healthcare Companies With Insider Buying During November 2012." Here is a look at five additional stocks that I found.
1. Corcept (CORT) is a pharmaceutical company engaged in the discovery, development and commercialization of drugs for the treatment of severe metabolic and psychiatric disorders. Korlym, a first-generation GR-II antagonist, is the company's first FDA-approved medication. The company has a phase 3 trial under way for mifepristone for treatment of the psychotic features of psychotic depression and a portfolio of selective GR-II antagonists that block the effects of cortisol but not progesterone. It owns extensive intellectual property covering the use of GR-II antagonists, including mifepristone, in the treatment of a wide variety of metabolic and psychiatric disorders. It also holds composition of matter patents for its selective GR-II antagonists.
Leonard Baker purchased 300,000 shares on November 5-7, through his funds. Baker has served as a member of the company's board since 1999. Since 1973, Baker has been a Managing Director of the General Partner of Sutter Hill Ventures, a venture capital firm.
The company reported the third-quarter financial results on October 31, with the following highlights:
|Net loss||$8.3 million|
|Shares outstanding||99.8 million|
|Cash per share||$1.02|
- MAA filing to EMA for a once-daily oral treatment of hyperglycemia secondary to endogenous Cushing's syndrome in adult patients with glucose intolerance or diabetes mellitus type 2 who have failed surgery or are not candidates for surgery.
- Phase 3 study of mifepristone for the treatment of psychotic depression. The company is expecting to conclude the enrollment in the study by the end of 2013.
The stock is trading at its 52 -week lows. The company has a cash position of $1.02 per share, which I would expect to act like a support for the stock. There has been one insider buy transaction and there have been eight insider sell transactions this year. There are four analyst buy ratings, one neutral rating and three sell ratings with an average price target of $6.26. The company has two upcoming milestones. The MAA filing could happen anytime. I have a neutral bias for the stock currently.
2. ChemoCentryx (CCXI) is a biopharmaceutical company focused exclusively on discovering, developing and commercializing orally-administered therapeutics to treat autoimmune diseases, inflammatory disorders and cancer. The company's drug candidates target specific chemokines or chemo-attractant receptors, thereby blocking the inflammatory response driven by that particular chemokine while leaving the rest of the immune system unaffected. The company's goal is to discover, develop and commercialize therapeutics with distinct advantages over currently marketed therapies in the company's disease areas of focus, thereby maximizing shareholder value.
Bvf Partners purchased 40,000 shares on November 6, and currently controls 3,750,277 shares of ChemoCentryx. ChemoCentryx has 36,171,295 shares outstanding, which makes Bvf Partners a 10.4% owner of ChemoCentryx.
The company reported the second-quarter financial results on August 10, with the following highlights:
|Net loss||$10.9 million|
The company's most advanced drug candidate, Traficet-EN (CCX282), which targets the CCR9 chemokine receptor, is currently in four pivotal Phase III clinical trials being conducted by ChemoCentryx's partner GlaxoSmithKline (GSK) for the treatment of patients with moderate-to-severe Crohn's disease. CCX140, the company's lead independent drug candidate, which targets the CCR2 chemokine receptor, successfully completed a trial for Type 2 diabetes and is currently in two Phase II clinical trials in patients with diabetic nephropathy, a form of kidney disease. CCX354, a CCR1 inhibitor, successfully completed a Phase II proof-of-concept clinical trial for the treatment of rheumatoid arthritis [RA]. This successful Phase II proof-of-concept clinical trial triggered GSK's option rights under the collaboration agreement. GSK exercised its option to further develop and commercialize CCX354 in November of 2011 and has an exclusive right to initiate a Phase IIb clinical trial for CCX354 in RA. CCX168, a C5aR inhibitor, completed Phase I clinical evaluation and is currently in a Phase II proof-of-concept clinical trial for the treatment of anti-neutrophil cytoplasmic antibody and is subject to GSK's option. CCX872, the company's independent next-generation CCR2 drug candidate for the treatment of metabolic diseases, is expected to enter a Phase I clinical trial in the second half of 2012. CCX507, the company's independent drug candidate for the treatment of inflammatory bowel disease [IBD] resulted from the company's de novo CCR9 program. CCX662, the company's independent drug candidate for the treatment of glioblastoma multiforme [GBM] is expected to enter a Phase I clinical trial in the first half of 2013.
The stock has an $18 price target from the Point and Figure chart. There have been three insider buy transactions and 19 insider sell transactions this year. There are three analyst buy ratings, 0 neutral ratings and 0 sell ratings with a average price target of $16.00. I have a neutral bias for the stock currently.
3. Valeant Pharmaceuticals (VRX) is a multinational specialty pharmaceutical company that develops and markets prescription and non prescription pharmaceutical products that make a meaningful difference in patients' lives. The company's growth strategy is to acquire, develop and commercialize new products through strategic partnerships, and strategically expand its pipeline by adding new compounds or products through product or company acquisitions. The company's products are primarily in the areas of dermatology, neurology and branded generics. With its headquarters in Montreal, Quebec, Valeant has approximately 7,000 employees worldwide.
- Howard Schiller purchased 18,300 shares on November 6, and currently holds 182,900 shares of the company. Howard Schiller joined Valeant in December 2011, and is the company's Executive Vice President and Chief Financial Officer. He was appointed to the board of the company in September 2012.
- Brian Stolz purchased 2,040 shares on November 7, and currently holds 26,650 shares of the company. Brian Stolz joined Valeant in July 2011, as Executive Vice President of Administration and Chief Human Capital Officer and will oversee Valeant's human resources.
- Lloyd Segal purchased 745 shares on November 6, and currently holds 17,609 shares of the company. Lloyd Segal serves as a director of the company.
The company reported the third-quarter financial results on November 2, with the following highlights:
|Net income||$7.6 million|
The company updated its previous 2012 guidance on November 2, from $4.55 to $4.75 cash EPS, or $1.25 to $1.45 cash EPS for the fourth quarter 2012, to $4.60 - $4.65 cash EPS, or $1.30 to $1.35 cash EPS for the fourth quarter of 2012, which excludes the interest expense of $0.12 cash EPS from the $2.75 billion Medicis related financing. Valeant is lowering 2012 adjusted cash flow from operations expectations from greater than $1.4 billion to $1.2 to $1.3 billion due to increased investment in working capital associated with the growth in emerging markets, asset deals which require an investment in working capital post-closing, and plant consolidations including the closing of the Bourdon facility in Canada and the exiting of a legacy Valeant contract manufacturer in Puerto Rico. Valeant is maintaining prior guidance of total revenue in the range of $3.4 to $3.6 billion.
Efinaconazole (IDP-108- pdf) update
- PDUFA date May 26, 2013
- The company has worldwide rights except for Japan, China, Taiwan and South Korea
- Plan to file in all territories where commercially viable
- Looking for partners in territories the company is not operating in
- Filed with Health Canada in October
- Kaken filed NDA in Japan in October
- Expect publication in leading dermatology journal by year end 2012
The stock has a bearish $47 price target from the Point and Figure chart. There have been 19 insider buy transactions and two insider sell transactions this year. There are five analyst buy ratings, five neutral ratings and 0 sell ratings with a average price target of $59.40. The company is trading at a P/E ratio of 284.58 and a forward P/E ratio of 10.73. I have a neutral bias for the stock currently.
4. HealthSouth (HLS) is the nation's largest owner and operator of inpatient rehabilitation hospitals in terms of patients treated and discharged, revenue and number of hospitals. Operating in 27 states across the country and in Puerto Rico, HealthSouth serves patients through its network of inpatient rehabilitation hospitals, outpatient rehabilitation satellite clinics and home health agencies. HealthSouth's hospitals provide a higher level of rehabilitative care to patients who are recovering from conditions such as stroke and other neurological disorders, orthopedic, cardiac and pulmonary conditions, brain and spinal cord injuries, and amputations.
- Jay Grinney purchased 11,300 shares on November 7, and currently holds 848,686 shares of the company. Jay Grinney was named president and chief executive officer of the company on May 10, 2004.
- Edward Blechschmidt purchased 2,000 shares on March 6, 200 shares on March 2, and 1,000 shares on March 1. Edward Blechschmidt currently holds 52,749 shares of the company and serves as a director of the company.
The company reported the third-quarter financial results on October 25, with the following highlights:
|Net income||$41.4 million|
Based on its year-to-date results and including the impact of the bonus to be paid to non-management employees in December 2012, the company is:
- narrowing its full-year 2012 Adjusted EBITDA guidance to a range of $490 million to $495 million from a range of $487 million to $495 million.
- raising its full-year 2012 guidance for income from continuing operations attributable to HealthSouth per share to a range of $1.49 to $1.53 per share from a range of $1.45 to $1.50 per share.
The stock has a $35.5 price target from the Point and Figure chart. There have been four insider buy transactions and two insider sell transactions this year. There are eight analyst buy ratings, two neutral ratings and one sell rating with a average price target of $25.08. The company is trading at a P/E ratio of 13.50 and a forward P/E ratio of 13.09. I have a cautiously bullish bias for the stock currently.
5. Vertex (VRTX) is a global biotechnology company that aims to discover, develop and commercialize innovative new medicines so people with serious diseases can lead better lives. Founded in 1989, Vertex today employs more than 2,000 people at sites around the world.
The company reported the third-quarter financial results on November 1, with the following highlights:
|Net loss||$57.5 million|
- Full-year Incivek revenue: Vertex reiterated on November 1 its guidance for full-year 2012 Incivek net revenue to be in the range of $1.1 billion to $1.25 billion. This guidance was initially established on July 30, 2012.
- Total operating expenses: Vertex also reiterated its guidance for 2012 total operating expenses, excluding cost of revenue, stock-based compensation expense and Alios expenses related to the accounting for the collaboration with Vertex, to be in the range of $1.03 billion to $1.13 billion. This guidance was initially established on February 2, 2012.
The stock has met its bearish $47 price target from the Point and Figure chart. There has been one insider buy transaction and there have been 49 insider sell transactions since May 2012. There are 16 analyst buy ratings, nine neutral ratings and one sell rating with a average price target of $64.29. I have a neutral bias for the stock currently.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in HLS over the next 72 hours.