Earning season is in full swing now so most insiders are blacked out until after their companies report quarterly numbers.

Notable buys

ARVN Arvinas Inc. Director Ratcliffe bought 1,000,000 shares on the IPO at a price of $16. Dir Flynn and Loven each bought $5 million worth. Arvinas priced at $16 opened at $21. The deal was increased to 7.5 million shares from 6.7 million and priced at the high end of the $14-$16 range but failed to hold support in the rough week the market had. This very early stage biotech company presents an offer to buy below the IPO price as it closed the week at $15.11.

EPZM Epizyme Inc Chairman Mott took advantage of depressed prices to scoop up $3.8 million of this beaten down early stage biotech on the secondary.  EPZM is focused on creating medicines that are targeted at specific causes of diseases, that are orally administered, tolerable, easy to take, and that are based on a deep understanding of the patients that will benefit from them. Since 2011, they have discovered five novel epigenetic therapies, three of which are in clinical development and two that have begun or will soon begin IND-enabling studies.

Odonate Therapeutics ODT  Chairman Kevin Tang bought $3.3 million at $19.50. ODT made a 52wk low this past week.  Tang is already in the red by nearly 10%.

IIPR Innovative Industrial Properties Chairman Gold increased his holdings by 21.5% when he purchased 67,500 at $40.  This is a notable purchase as IIPR is near its 52 wk high of $49.79.  Usually insiders are buying at depressed prices so we pay particular attention to buys when the stock is doing well.  This is a sign that the market believes business is good and insiders believe its getting even better. Innovative Industrial Properties (NYSE:IIPR) priced its public offering of 2.6M common stock at $40/share for gross proceeds of $104M. IIIPR is a REIT that bills itself as the leading provider of real estate capital for the medical-use cannabis industry. Everything cannabis related is too hot to touch for our comfort level including this REIT.

Notable Sells

Most of the sales last week were planned sales or secondaries so its not easy to read too much into them.

In this report, we examined open market purchases from employees  and directors ending the week of October 5 2018. Insiders sell stock for many reasons, but they generally buy for just one – to make money.  As a standard, we only look at material amounts of money, $200 thousand or more, as anything less could just be window dressing.  The bar is different with selling, because the natural state of management is to be sellers. This is because most companies provide significant amounts of management compensation packages as stock. Therefore, with selling, we analyze for unusual patterns, such as insiders selling 25 percent or more of their holdings or multiple insiders selling near 52 week lows.Another red flag are large planned sale programs that start without warning. We generally ignore 10 percent shareholders as they tend to be OPM (other people’s money) and not the SMART money we are trying to go to school on.  Although this info is available for free from the SEC’s Web site , Edgar, we subscribe to the Washington Service as they provide a way to manage and make sense of the vast realms of data.
To learn more about our strategy, visit our website here. We welcome your comments on our analysis. We may own positions, long or short, in any of these names and are under no obligation to disclose that.