Update on Igen. From Yahoo board.
The following article appeared today in Maryland's legal and business journal, "The Daily Record," under the headline "Execs Take Plunge."
In an act of faith that experts in the biotechnology world say is unusual, two top executives of Gaithersburg-based Igen International Inc. last month exercised stock options to purchase 180,000 shares of their company at market price.
At a time when most top biotechnology executives are selling their stock rather than buying more, such major insider purchases stand out, according to Chapin, Davis analyst and broker Luke Smith.
On July 22, Igen CEO Samuel J. Wohlstadter exercised his option to buy 100,000 shares of the company’s stock at $20.63 — the market price for the day — and Chief Operating Officer Richard J. Massey purchased 80,000 shares at the same price, according to the company’s Securities and Exchange Commission filings.
Stock in Igen, which manufactures products for detecting and measuring biological substances in pharmaceutical and other fields, has ranged between $11.50 and $41 on the Nasdaq in the past 52 weeks.
“There have been many insider sales” in the biotech world of late, Smith said, “partly because a lot of biotech stocks have run up in the past year, [creating] chances to cash in with huge gains.”
But Wohlstadter and Massey bucked the trend, risking “millions of dollars,” said Smith, if the stock were to fall drastically.
“Contrast that with Gene Logic,” said Smith, “with over a million shares sold and none bought in the last six months. This is something you should pay attention to.”
Igen should have plenty to pay attention to in the future, said Smith.
“There’s a lot of things going on that will hopefully make these exercises look very smart,” said Smith.
For example, the company is coming closer than ever to solving a costly dispute over royalties with Roche Diagnostics.
Igen also formed a potentially lucrative alliance Aug. 2 with Bayer Diagnostics for the development of new products.
Igen spokesman Steve Push said the executives acted on their confidence in the company and its future.
“They have a tremendous amount of faith and optimism in the company,” Push said. “They believe it’s a good investment.”
Both Smith and Push added that tax liabilities for such a stock purchase are significantly lower when the options are exercised at market price.
“I watch the insiders because they know more about what’s going on in the company than anyone else does,” said Smith.
And Wohlstadter’s reputation in the biotech industry does well to boost confidence in his judgment, Smith added.
“Many would consider Wohlstadter very smart money in the biotech world,” the analyst said. “This is a well known venture capitalist in effect paying retail prices for a significant amount of stock.”
Igen’s stock closed at $18.50 Friday, up a little more than 1 percent from Thursday. |
