Gilead's insider selling raises investor suspicion
But after such a monumental run triggered by these breakthrough hepatitis C drugs, investors have to wonder whether Gilead has anything left in the tank. Normally, investors would look for Gilead's clinical pipeline data, its sales data, and commentary from management to drive their decision of whether to keep or jettison their shares. However, a sizable sale from three members of management, including CEO John Martin, could have some investors running for the exits.
According to filings with the Securities and Exchange Commission, Martin exercised options on June 1 and sold 150,000 shares of Gilead stock for proceeds of $17.1 million. This follows another 150,000 shares that Martin exercised on May 1 which netted him $15.7 million. Additionally, Gregg Alton, the executive vice president of corporate and medical affairs, and Paul Carter, the executive vice president of commercial operations, exercised their options and sold 17,000 shares, and 3,000 shares, respectively.
All told, we saw more than $19 million in Gilead shares get jettisoned by its management team to start June, and over the last six months nearly 2.1 million shares have been sold by insiders over 48 separate transactions -- and all without a single insider purchase.
Should this be cause for concern among shareholders?