Pharmos officers selling options a month before test results
05.12.2004 | 11:51
Omri Cohen
In less than a Pharmos Corporation (Nasdaq:PARS, Nasdaq Europe: PHRM) will be releasing the results of phase III clinical trials for dexanabinol, its cannabis-based treatment for traumatic brain injury. The market for the drug is estimated to be hundreds of millions of dollars a year. As the marketplace bites its nails in anxious anticipation, three company executives advised the U.S. Securities and Exchange Commission that they have exercised options and sold shares, gaining hundreds of thousands of dollars.
Last Monday, company chairman and chief executive Haim Aviv converted options into 199,400 shares, which he sold for $821,400. After deducting his conversion costs, he netted about $380,000.
His selloff has to have investors wondering if optimism about the Phase III testing is misguided.
Aviv refused to comment for this report, but the company itself said that Aviv does not know the results of the trials. He simply decided to diversify his risk. The fact that he was selling proves he knows nothing: if he had insider knowledge of the results his selloff would be criminal, Pharmos pointed out.
The company added that Aviv had received the options nine years ago, and they were due to expire in about a year. That does not mean he had to exercise them now. He could have waited a month.
pharmos
Royal Bank of Canada has estimated the market that dexanabinol addresses to be worth $1.1 billion a year. If the drug passes muster, and Pharmos hooks up with a major marketer, it could be a worldwide blockbuster. Assuming all that, RBC predicted 148 million sales for Pharmos in 2008.
Aviv was not the only one to sell. On Monday company president Gad Riesenfeld exercised 123,400 options, selling them for $500,000 and making himself $320,000. Riesenfeld has explained his moves are technical: he had deposited options with Morgan Stanley, with instructions to sell in installments beyond a share price of $3.8.
Director Meni Ben-Dor sold 28,800 options and made $73,000.
|
