Insiders Just Bought $234 Million Worth of These Pharma Stocks

Insiders Just Bought $234 Million Worth of These Pharma Stocks June 22, 2017
By Mark Terry, BioSpace.com Breaking News Staff

Generally speaking, if company executives are buying shares of their own company’s stock, they’re doing it because they think it’s underpriced and will go up—maybe way up—in the near future. TheStreet takes a look at two biotech companies whose execs have loaded up on company shares, even if it’s not immediately obvious why they would do so.

1. Alexion Pharmaceuticals

Headquartered in New Haven, Conn., Alexion Pharmaceuticals is a rare-disease company best known for Soliris for atypical hemolytic uremic syndrome and paroxysmal nocturnal hemoglobinuria.

It is also well known, unfortunately, for recent scandals. In May 2015 it received a subpoena about an investigation by the Enforcement Division of the U.S. Securities and Exchange Commission (SEC) related to grant-making activities and compliance with the Foreign Corrupt Practices Act (FCPA) in several countries. As a result of the scandal, the company’s chief executive officer and chief financial officer left the company. Around the same time its attempt to diversify by acquiring Syngenta for $8.4 billion collapsed. In March, Ludwig Hantson, formerly president and chief executive officer of Baxalta , took over as chief executive officer.

There have also been investigations into the company’s heavy-handed marketing approach and use of un-blinded laboratory results to identify potential patients.

TheStreet notes that one of the company’s directors recently bought 2,009,734 shares of company stock worth $234.44 million, which comes to $114.33 to $117.95 per share.

Roberto Pedone, for TheStreet, wrote, “If you’re bullish on Alexion, I would look for long-biased trades if this stock is trending above key support at $113.22, and then once it breaks out above its 200-day at $122.93, with volume near or above its three-month average of 3 million shares. Some possible upside targets off that breakout are $130 to $133.67, or even $135 to $138 a share.”

Alexion is currently trading for $125.29.

2. Acorda Therapeutics

Based in Ardsley, NY, Acorda Therapeutics focuses on therapeutics for multiple sclerosis, spinal cord injury and other disorders of the central nervous system. In April, the company announced significant restructuring, including laying off approximately 20 percent of its 597 staffers. This came only a few weeks after the U.S. District Court for the District of Delaware overturned four of the company’s key patents for its lead drug Ampyra for multiple sclerosis. That leaves Acorda with a single patent coverage for the drug, although it plans to appeal the decision.

Acorda has a market cap of $862 million and its estimated growth rate for this year is 692 percent, even though for 2018—when it loses patent protection for Ampyra—its growth rate is projected at -47 percent.

The company’s chief executive officer and president, Ron Cohen, recently acquired 20,000 shares for $338,000, or about $16.95 per share.

Pedone wrote, “If you’re bullish on Acorda, I would look for long-biased trades if this stock is trending above its 50-day at $16, and then once it breaks out above key resistance levels at $19 to its 200-day at $20.54, with volume near or above its three-month average of 1.14 million shares. Some possible upside targets off that breakout are $25 to $27 a share.”

Acorda is currently trading for $19.22.

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