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Genentech Insiders Sell 1 Million Shares

June 11, 2003|Denise Gellene | Times Staff Writer

Genentech Inc. Chief Executive Arthur D. Levinson and other top executives recently sold shares in the biotech company after manic investors drove the stock higher on positive news about a cancer drug.

Eight insiders have sold nearly 1 million shares valued at $58.9 million since May 20, when the company announced that its experimental drug Avastin extended the lives of colon cancer patients in a large clinical trial.

Shares in the South San Francisco-based company have risen 85% since that date, closing at $70.60 on Tuesday, up 80 cents on the New York Stock Exchange.

Wall Street analysts believe annual sales of Avastin could exceed $1 billion and a dozen have recently issued "buy" recommendations on the stock.

Since May 20, Levinson has sold more than 300,000 Genentech shares valued at more than $16 million. According to Genentech's proxy, Levinson on Dec. 31 had options that could be converted into 2.3 million shares.

A Genentech spokeswoman said that Levinson and others sold only a portion of their holdings and that the company had no comment on their financial planning decisions.

The sales are not a "huge red flag," said Jonathan Mooreland, vice president of InsiderInsights.com.

"It is very common to see insiders sell shares when the stock performs well," Mooreland said. The sales involved options that had been converted into shares.

Mooreland said that a "slight negative" for investors is that the eight insiders own few Genentech shares. "No one is exercising and holding on to their shares in the belief the stock is going to go higher," he said.

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