This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Programmed Insider Buying? Yes, at Insmed and United Therapeutics

BOSTON ( TheStreet) -- Biotech insiders are quite skilled at selling stock granted to them for free or at low cost by cozy boards. When it comes to buying their company's stock -- you know, the way "ordinary" shareholders buy -- the same biotech insiders rarely step up.

This is why 10b5-1 buying plans recently put in place by the CEOs of Insmed (INSM) and United Therapeutics (UTHR - Get Report) are so unusual and noteworthy.

No typo. Insmed CEO Will Lewis and United Therapeutics' Martine Rothblatt have taken the all-too-common 10b5-1 selling plan -- the bane of shareholders everywhere -- and turned it upside down. They're buying shares of their companies at pre-determined time points

Insmed is a development-stage biotech in pivotal trials for an inhaled, long-acting formulation of the antibiotic Arikace. Cystic fibrosis and non-tuberculosis bacteria are the initial target indications. Results from studies are expected in 2013. Lewis has been CEO of Insmed since last September the company's stock price has performed quite well during his short tenure, up nearly 100% from $3.40 to $6.40. Even with the strong share returns in that time, Lewis has stepped up with his buying program.

United Therapeutics is a more established biotech company with several marketed and experimental drugs used to treat pulmonary arterial hypertension (PAH.) The company's stock took a hit late last year when the FDA declined to approval an oral formulation of its flagship product Remodulin. Despite the bad news hitting United Therapeutics, it's very nice to see Rosenblatt add to her ownership position in a material way with a 10b5-1 buying plan.

I wish more biotech CEOs would emulate the inside buying of Lewis and Rosenblatt. All too often, we hear biotech CEOs complain about how cheap their stock is, or they blame short sellers for drops in share prices. Well, if they really believed their stock was cheap, they'd be buying it. Instead, most insiders just sit passively on their holdings, or worse, sell whenever the wind blows.

Biotech executives: Show confidence in your leadership and ability to generate shareholder value, just as your colleagues at Insmed and United Therapeutics are doing.

Silverman has no position in Insmed or United Therapeutics.
Jim Silverman is the managing member of RRC Bio Fund LP, a Boston-based hedge fund focused on small-cap biotech. RRC Bio was launched in 2007. Silverman also founded Risk/Reward Capital Management in 1997, a registered investment advisory. He lives in Cambridge, Mass., and received a BBA in finance from The George Washington University.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
INSM $12.15 0.00%
UTHR $105.20 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs