Insider trading activity has been relatively weak this week, as the first quarter earnings season kicked off on Monday. With most companies having quiet periods in place prior to quarterly earnings announcements, the insider buying activity in particular has been very low. According to S&P Capital IQ, first quarter earnings are expected to decline by 8.1% year-over-year, which would mark the worst quarterly drop since 2009. Notably, this earnings period will enable investors to better understand the health of the U.S energy sector, as Wall Street banks are anticipated to reveal whether they have been building up more reserves to cover possible losses from troubled energy companies. Indeed, the oil and natural gas sector is expected to put significant weight on first quarter earnings. Leaving the discussion about earnings aside, this article will discuss several noteworthy insider transactions reported with the SEC on Tuesday. Precisely, we will examine the insider buying activity registered at a pharmaceutical company and the insider selling witnessed at two other companies.
Academic research has shown that certain insider purchases historically outperformed the market by an average of seven percentage points per year. This effect is more pronounced in small-cap stocks. Another exception is the small-cap stock picks of hedge funds. Our research has shown that imitating the 15 most popular small-cap stocks among hedge funds outperformed the market by nearly a percentage point per month between 1999 and 2012 (read more details here).
This Pharmaceutical Company’s CEO Buys Sizable Block of Shares
OHR Pharmaceutical Inc. (NASDAQ:OHRP) had its most powerful executive buy a sizable block of shares earlier this week. Chief Executive Officer Jason Scott Slakter bought 6,250 shares on Monday at $3.35 apiece, lifting his ownership to 884,504 shares. Dr. Slakter also holds an indirect ownership stake of 697,865 shares, which is held by SKS Ocular I LLC.
OHR Pharmaceutical is a pharmaceutical company that focuses on developing novel therapeutics and delivery technologies for the treatment of ocular diseases. The company’s lead clinical program, known as OHR-102 eye drops, represents a therapeutic product that is said to offer a non-invasive therapy to improve vision outcomes without requiring multiple injections per office visit. OHR Pharmaceutical Inc. (NASDAQ:OHRP) is currently evaluating OHR-102 eye drops for the treatment of retinal diseases such as wet-AMD, retinal vein occlusion, and proliferative diabetic retinopathy. The company has several other active programs that are studying molecules and approaches for the treatment of glaucoma, steroid induced glaucoma, ocular allergy, and retinal disease. Going back to the company’s lead clinical program, OHR’s management recently announced the commencement of two planned Phase III clinical studies that are set to evaluate the efficacy and safety of OHR-102, also known as Squalamine, in combination with Lucentis injections for the treatment of neovascular age-related macular degeneration, or wet-AMD.
Analysts at Roth Capital Partners have a ‘Buy’ rating on the ophthalmology research and development company, along with a price target of $30 on its shares, suggesting considerable upside of about 900%. Furthermore, Roth Capital’s price target is solely based on a Net Present Value analysis for the aforementioned OHR-102 in wet-AMD, and that in the United States alone. The investment banking firm said last year that “OHR-102 may reach ~1.3B in U.S. annual sales by 2023” as long as OHR launches the drug in 2019. OHR’s shares have plummeted by 46% since the beginning of 2016, but are up by 20% in the past year. There were six hedge funds which we track at Insider Monkey which had stakes in the pharmaceutical company at the end of December, amassing a mere 2% of its outstanding shares. Baker Bros. Advisors, managed by Julian Baker and Felix Baker, owns 370,370 shares of OHR Pharmaceutical Inc. (NASDAQ:OHRP) as of the end of 2015.