Alkermes Insider Buys $816k Worth of Stock After Spinoff Announcement

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Insider buying can provide clues about a stock’s next move. Insiders sell company stock for a number of reasons. Yet they only buy stock for one reason – they expect it to rise.

In this report, we are going to highlight a large insider purchase at Alkermes PLC (ALKS:US). Alkermes is a fully-integrated, global biopharmaceutical company that has a portfolio of proprietary commercial products focused on alcohol dependence, opioid dependence, schizophrenia, and bipolar I disorder, and a pipeline of product candidates in development for neurological disorders and cancer. It is listed on the Nasdaq and currently has a market cap of approximately $3.98 billion.

Insider Buying at Alkermes

Our data shows that on November 14, board member David Daglio purchased 35,000 ALKS shares at a price of $23.31 per share. This trade cost the insider $815,735 and increased his holding to 80,000 shares.

Investment Background

This trade is worth highlighting for a couple of reasons.

Firstly, Mr. Daglio has an investment background. Previously, he served as Chief Investment Officer of Mellon Investments. He also served as Mellon’s Head of Opportunistic Value Strategies. So, is likely to have a good understanding of Alkermes’ intrinsic value.

Secondly, this is a large purchase. Not only is it large in nominal terms but it is also large in relative terms, having increased the size of the insider’s holding by nearly 80%. The size of the trade suggests that Mr. Daglio is very optimistic that the stock is set to move higher.

Oncology Spinoff

Alkermes recently told investors that it is exploring the idea of spinning off its oncology business.

The company believes that spinning off this part of the business into an independent, publicly-traded company would drive a sharp strategic focus for each business, simplify capital allocation decision-making, increase flexibility to pursue growth and investment strategies, and enable the capital markets to better assess each business' value, performance, and potential.

Alkermes also recently upgraded its guidance for full-year 2022 on the back of strong performance from LYBALVI, its medication for the treatment of Schizophrenia and Bipolar I Disorder. It now expects to deliver non-GAAP earnings per share of $0.15 to $0.33, up from previous guidance of $0.09 to $0.27.

In light of these developments, we see insider buying here as a bullish indicator.