Before we get started, we can’t remember the last time it was this difficult to find an idea worth consideration. We reviewed all of last week’s buys and had to dig deep, real deep to uncover an insider buy with purpose.
Normally, we look for cluster buys, a history of successful trades for the same company highlighted in this space, a buy against a sea of selling… we have none of that this week. Instead, we have a director who purchased the stock for the first time, and we are examining it against a backdrop of previous buys and sells of a different company.
Gritstone Oncology, Inc. (GRTS) Director Thomas Woiwode, Ph.D. purchased 1,347,710 shares of the immuno-oncology company at $3.71 for a clean $5 million. (1) Woiwode has made some serious money in the biotech space with an estimated net worth of at least $44.4 million. (2). Five-million dollars is not chump change for the chemistry Ph.D. from Stanford University. The GRTS investment is significant relative to his estimated net worth.
While Woiwode has no previous history buying and selling Gritstone, we can look at some of his past trades to evaluate his success or failure. In October 2016, he bought 161,000 shares of CRISPR Therapeutics AG (CRSP) at $14 per share for a little more than $2.2 million. A year later, he started to sell CRSP at $20.21 and kept on selling all the way up to $57.99 in May 2019. (1) Today, CRISPR trades at $193.82, as of this keystroke.
When you put the three together, industry expertise, investing a significant chunk of his net worth and Woiwode previous insider trading history, the sum adds up to an insider buy with purpose, based on our experience.
Gritstone Oncology is a clinical-stage biotechnology company in the process of developing “next generation” cancer immunotherapies to fight multiple cancer types. That means they don’t have products yet. However, they currently have two product candidates in the FDA approval process.
GRANITE is a personalized neoantigen-based immunotherapy. It is being evaluated in the Phase 2 portion of a Phase 1/2 clinical study.
SLATE utilizes the same antigen delivery system as GRANITE but contains a fixed set of neoantigens that are shared across a subset of cancer patients rather than neoantigens unique to an individual patient is being evaluated in the Phase 2 portion of a Phase I/2 clinical study.
The company is not expected to turn a profit for the foreseeable future and without a product, GRTS will need to rely on partnerships, debt and stock offering for revenue. Gritstone’s shares will be likely be highly volatile as approval related news is released for GRANITE and SLATE.
Gritstone Oncology, Inc. (GRTS) is appropriate for investors with the highest risk tolerance. Obviously, the cancer market offers investors tremendous upside. According to Zion Market Research, the global demand for cancer drugs is expected to generate revenue of around USD 161.30 billion by the end of 2021. (3) Thomas Woiwode’s previous success and expertise in the biotech space suggests, but does not guarantee, GRTS could have a better chance than most upstart biotechnology companies to succeed.
1 – https://www.secform4.com/insider-trading/1619294.htm
2 – https://wallmine.com/people/673/thomas-woiwode
3 – https://www.globenewswire.com/news-release/2016/12/12/896798/0/en/Global-Cancer-Drugs-Market-expected-to-reach-USD-161-30-Billion-by-2021-Zion-Market-Research.html#