Human Genome Sciences… When Insiders Sell Stock (HGSI)
Human Genome Sciences, Inc. (NASDAQ: HGSI) has been one of the great biotech success stories, with returns far dwarfing the 10-bagger or 1,000%. This went from a small genomics company to a company with what seems to be or likely to be the newest lupus treatment in a generation after (and if) the FDA approves of it. While management has been quick to quiet buyout rumors, the investment community for most of 2009 was betting or hoping that the company would be acquired.
Yet when you see insiders making share sales, and some significant share sales, it probably makes you think no real deal is on the table. In short, buying Human Genome Sciences here now better be for that pending FDA approval and for its pipeline rather than for a hope of a buyout. Here were the insider sales we have seen so far this month:
James Davis, Exec. VP, Gen Counsel & Sec., had the largest sale seen so far in filings this month. He exercised and sold 134,000 shares, clearing what looks to be a $2 million gain. He still holds 78,040 direct shares.
Timoth Barabe, CFO exercised and sold 22,907 for a profit of more than $400,000, and he still holds 45,095.84 direct shares and many more stock options.
Earlier this week was the exercise of 50,000 options by VP David Stump at $12.56 and sold at $27.40. That came to a profit of over $740,000 and leaves more than 19,500 shares still held.
VP Susan Bateson exercised and sold 20,000 shares for more than $350,000 in gains and she still has 60,358 direct shares still held.
Biotech executives had nothing to do with the financial crisis, and this is in no way geared to imply anything sinister is at work. They do not need to be bashed for making money, particularly if this Benlysta lupus treatment makes it to market. It is frequent for biotech and biohealth insiders to sell shares. This just seems like another tempering of any remaining buyout expectations…. particularly when it is percentages of holdings being sold this large.
These filings have been coincidental with a fairly strong sell-off in the markets. Human Genome shares are down 4.7% at $26.51 on light trading volume.
JON C. OGG
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7 Responses to “Human Genome Sciences… When Insiders Sell Stock (HGSI)”
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Great article, panic is in the market, more down side might be in our future, IMO
Why would the sell-off take place? If we’re seeing the top stockholders selling between 33.69%-63.20% I believe we’re getting an AMAZING red light…something big is going on…I particulary like this stock but a news like this can make any investor tumble. Beside the artice dosesn’t specify if the option they still hold are calls or puts, the difference between the outcome of this two options is substantial
Technical analysis suggest that the stock has found a new resistance around 26.10 (amazing enough it’s the same price the stock close); nevertheless the resistance seems fairly weak because the stock has close with much more people selling than buying meaning we could see a less than significant gain in the wee hours of the market (technical rebound) before the selloff and market condition put some pressure on the downside. The hammer figure has appear in the graph, probably signaling a local minimum at 25.71; I think that the stock won’t fall so bad, at least not during the first hours, but anyhow this level is below the resistance.
HGSI will continue its growth.
Even the insiders know it, they are still keeping
thousands of shares. Some might sell for cash liquidity needs
The reasons as to why do any stockholder sell are many, I’m not sure if you would sell so many stock just for liquidity needs (you had to be VERY needy). Anyhow the main tendency was as I said: the stock rebound in the wee hour just to dive and zig zag later on during the day (nevertheless the dive was the trend maker); the final outcome wasn’t as I thought it could end: the market close and HGSI rose to 26.74 (2.45%) with and outstanding last breath in the market last quarter (the stock was around $25.52 until 2:25 pm aprox). Like I said before: I like this stock, but the sell-off has put that feeling on edge; the targets are still very high (bordering 110) ¿any risk –lovers around?
Today’s tech show a stock basically in the middle upper part of the resistance level signaling we could see some more growing this upcoming Monday, but the pressure is on: once again the stock close with a stronger “ask” side (offer around 7 times bigger than the demand), given the last quarter rally this could mean a rough Monday morning.
The stock pretty much reacted like the tech said it would, except that instead of a hard morning it had a rough day. Anyway, I got the target mixed up between this and another stock I’m following, sorry for that; the actual target today for HGSI published in bloomberg are: 38,28,32,37….and so on…we are seeing a average 12 month target around 33.75; pretty good target, like I said before: any risk – lovers around? I’ll be following this stock, let see whta the tech shows in the days to come.
What a difference a day or two can make! Closed at $29.40 or so on 2/13. Watkins was supposed to be the presenter at the BIO_CEO Investor conference in NY last week, but he was replaced by Labinger the CCO. The phase II clinical trial for its cancer drug is due this month, no mention of a date for release of that data. Rumours that AMGN and Glaxo are bidding in the mid 40’s (try mid 60’s if you really want the company) all add up to a very positive place for HGSI and panic city for the shorts.