Like professional money managers, boardroom investors seem leery of the energizer rally. The number of companies reporting insider purchases last week was a blah 64. Records have been below the 100 threshold for some time.
However, one insider has taken the bunny with a drum approach and keeps buying, and buying, and … La Jolla Pharmaceutical Company's (NASDAQ:LJPC) Chief Exec. Officer, President, Principal Financial Officer, Principal Accounting Officer, Sec. and Director, Dr. George F. Tidmarsh M.D., Ph.D., bought 19,000 LJPC shares at $10.50 for a total investment of $199,500.
How in the world does all that alphabet soup fit on the man's business card?
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La Jolla Pharmaceutical Company, a biopharmaceutical company, focuses on the discovery, development, and commercialization of therapeutics for chronic organ failure and cancer. The company's products include GCS-100 that is in Phase II clinical trial for the treatment of chronic kidney disease. It also provides LJPC-501, a peptide agonist of the renin-angiotensin system, which is designed to help restore kidney function in patients with hepatorenal syndrome; and LJPC-401, a peptide for the treatment of iron disorders.
It is Mr. All-Everything's fifth purchase since February 2014 but most significantly, it is Tidmarsh's largest purchase to date, more than doubling the next most costly of $88,000 in May 2014.
It's also interesting to note the most recent $10.50 purchase is almost a 50% premium to the CEO's original foray at $7.25. More money at a higher price, one has to come to the conclusion the doctor is a believer.
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Based on what we've found, it is our opinion that the insider has his eye on early 2015. That's when La Jolla Pharmaceutical "plans to initiate a Phase 3 registration study for LJPC-501 in patients with catecholamine-resistant hypotension (CRH)."
Additionally, "La Jolla intends to file an IND and begin a phase 1 investigation of LJPC-1010 in NASH in the first half of 2015."
Looking at the biotech's chart, the stock touched as much as $18 in the early part of the year. Since, shares have been setting towards support from $9 -$7.50. Considering recent weakness in the overall market, patient investors might get a better price than today.
Longer-term, La Jolla could eventually build a rounded bottom and take another shot at all-time highs based on the news flow in the early to mid-part of 2015.
Now, La Jolla is expected to bleed money and have little to no revenue for the foreseeable future, according to current analyst sales and earnings estimates. Most of the money will come via some sort of offering, which will dilute shares. So, LJPC is only appropriate for investors with a tolerance for high, high risk i.e. the kind of folks who ride the wildest rollercoasters with their hands up. Perhaps, that's George F. Tidmarsh in the front car.