One of the most bullish insider transaction patterns is ‘cluster buying’. This is where three or more insiders at the same organization are buying company stock simultaneously.
In this report, we are going to highlight a cluster buying pattern at Harrow Health Inc (HROW:US). Harrow Health is an American ophthalmic healthcare company. Based in Nashville, it makes pharmaceutical products for ophthalmic surgeries in the US, as well as medications prescribed to treat patients managing chronic and acute eye conditions such as dry eye disease, glaucoma, allergies, and infections. The company is listed on the Nasdaq and currently has a market cap of $424 million.
Insider Buying at Harrow Health
Our data shows that between December 21 and December 22, four insiders at Harrow Health purchased stock. Those who bought shares were:
- CEO Mark Baum (25,000 shares @ $13.39 per share)
- CFO Andrew Boll (2,500 shares @ $13.54 per share)
- Board member Laurence Van Horn (1,860 shares @ $13.42 per share)
- Board member Martin Makary (25,000 shares @ $13.37 per share)
Combined, the four insiders invested around $730,000 in company stock.
All of these insiders have considerable experience in the healthcare space.
Mr. Baum is the founder of Harrow. He is also a founder of Eton Pharmaceuticals, Melt Pharmaceuticals, and Surface Ophthalmics and Visionology. Prior to Harrow, he was the founder of TBLF, LLC, a private investment fund manager, where he made more investments in more than 40 private and public companies.
Mr. Boll is one of the founding employees of Harrow. Previously, he helped form and create Eton Pharmaceuticals, Surface Ophthalmics, Melt Pharmaceuticals, and ImprimisRx.
Dr. Makary is the Chief of Islet Transplant Surgery at the Johns Hopkins Hospital in Baltimore, where he has been employed since 2002. He is a frequent public policy expert in the media and a leading voice for physicians.
Mr. Van Horn is an entrepreneur, board member, and expert in healthcare management and economics. His research has appeared in leading journals such as the Journal of Health Economics, the Journal of Law and Economics, the Journal of Public Budgeting and Financial Management, and the Harvard Business Review.
Given their experience, the insiders are likely to have a good understanding of Harrow Health’s prospects.
In mid-December, Harrow Health announced that it had entered into a binding agreement for the acquisition of the exclusive US commercial rights to five FDA‑approved ophthalmic products from Novartis.
The acquisition, which is expected to close in early 2023, transfers exclusive US rights to Harrow for the following products:
- ILEVRO® 0.3%, a non-steroidal, anti-inflammatory eye drop indicated for pain and inflammation associated with cataract surgery.
- NEVANAC® 0.1%, a non-steroidal, anti-inflammatory eye drop indicated for pain and inflammation associated with cataract surgery.
- VIGAMOX® 0.5%, a fluoroquinolone antibiotic eye drop for the treatment of bacterial conjunctivitis caused by susceptible strains of organisms.
- MAXIDEX® 0.1%, a steroid eye drop for steroid-responsive inflammatory conditions of the palpebral and bulbar conjunctiva, cornea, and anterior segment of the globe.
- TRIESENCE® 40 mg/ml, a steroid injection for the treatment of certain ophthalmic diseases and for visualization during vitrectomy.
Harrow Health has described this deal as a “landmark transaction”.
“This is a landmark transaction for Harrow, catapulting Harrow into a leadership position in the US ophthalmic pharmaceuticals market. Following the satisfaction of the relevant closing conditions, these products will be immediately accretive to our revenues and excellently complement our current portfolio of ophthalmic prescription products,” said Mr. Baum.
“Revenue contribution from these products is expected to grow for many years. Assuming this transaction closes during the first quarter of 2023, Harrow expects 2023 net revenues to be between $135 million and $143 million and adjusted EBITDA to be between $44 million and $50 million, with both net revenues and adjusted EBITDA ramping up during 2024 and beyond,” added the CEO.
In light of this deal, we see the insider buying activity here as a bullish indicator.