Verastem, Richarld Aldrich: Richard Aldrich purchased 1,000 shares of Verastem Inc (NASDAQ:VSTM) on Monday at $12.57 per share, for a total sum of $12,570. This member of the Board of Directors now holds 17,000 shares of common stock indirectly, through the Richard H. Aldrich 2005 Revocable Trust. These holdings amount to approximately $195,330.
In addition to the holdings mentioned, Aldrich controls another 2,869,841 shares of common stock through the Longwood Fund, L.P., amounting to approximately $32.9 million. Additionally, the Richard H. Aldrich Irrevocable Trust of 2011 controls another 135,714 shares. Apart from these indirect holdings, the Director has direct ownership of 407,142 shares, or around $4.6 million.
Aldrich has been responsible for a large amount of insider trading recently. The Director has purchased Verastem stock on 17 different occasions this year, always in amounts of 1,000 shares per transaction. Prices have varied from $14.11 since his initial purchase on July 1st, to their current value of $11.49 as of Monday October 21st. This represents a 22.8% decrease in share value.
Monday’s purchase was accompanied by Verastem’s presentation at the 2013 AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in Boston. The company announced that the first phase portion of its Phase 1/1b study of defactinib, in combination with paclitaxel in patients with ovarian cancer, has produced positive results. Hence, the insider trade comes as little surprise, as Aldrich seeks to benefit from the firm’s potential breakthrough in its ovarian cancer treatment.
What does seem odd is the loss of share value. The insider purchase, along with the positive results of the clinical and preclinical study, should have boosted shareholders’ confidence in the company. In light of the 8.15% drop the stock experienced on Monday, Aldrich’s purchase seems more of a limp attempt to maintain share value, rather than an expression of confidence in the firm’s future.
Disclosure: Pablo Erbar holds no position in any stocks mentioned
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