WASHINGTON _ Corporate officers in the biotechnology industrydon't appear to be betting their own money on the future of theircompanies in 1994.CDA/Investnet, a Fort Lauderdale, Fla.-based company that tracksinsider trading activity in 69 different business sectors, listsbiotechnology among only 10 industries in which selling outpacedbuying over the last 90 days. The 90-day moving average is derivedfrom Securities and Exchange Commission filings from a total of 46biotechnology companies."There are so few sectors where robust [insider] selling is going on,biotechnology stands out right now," CDA/Investnet president BobGabele told BioWorld. "Of all the hundreds of thousand of trades thattake place, we look for movement that stands out, that could beprescient in some manner."Gabele said biotech insider selling began in December of last year andhas continued unabated. The finding is unexpected since insiderstypically buy when stock prices are low, rather than sell. And prices arecertainly low: the AMEX and CBOE biotechnology stock indices haveboth dropped about 30 percent so far in 1994.Amgen Inc. Leads The PackLeading the sellers' pack in 1994 are top executives from Amgen Inc.Other biotech companies made Gabele's list for their selling activity,most notably CellPro Inc., of Bothell, Wash., and Collagen Corp., ofPalo Alto, Calif., but he generally discounts insider selling at relativelyyoung companies, such as CellPro.In addition Gabele overlooked 4 million shares sold by insiders at Bio-Technology General Corp. because the primary seller was financierDavid Blech. At the time, Blech was attempting to liquidate his assetsfor reasons unrelated to the company."I'm looking for heavy activity at mature companies," he explained.He said he looks for the number of insiders selling, rather than thevolume of shares sold.The selling activity at Amgen, based in Thousand Oaks, Calif.(NASDAQ:AMGN), caught Gabele's eye last month. He mentionedthe company in a June 17 report to clients, noting that in the month ofMay alone, seven insiders filed sales or intentions to sell 247,494shares of Amgen stock worth more than $11 million."This marks the heaviest selling by insiders here since the pre-dropperiod in early 1993, when the stock was trading in the $75 range _increasing selling on the rebound from a drop, the likes of which wesaw this year, causes us to urge caution at these levels," the reportstates. Amgen stock closed Thursday at $44.19, down $5.31 per share(11 percent) since the end of 1993.The trading activity of five Amgen executive officers in the first fivemonths of 1994 is detailed below:y CEO and chairman of the board Gordon Binder sold 115,000 sharesof stock at prices ranging from $40.50 to $47 (79,000 of the shareswere sold in May). The stock fetched more than $5 million on the openmarket. The shares sold represented 61 percent of Binder's total directholdings on Dec. 31, 1993 (he had options and warrants to purchase754,316 additional shares at that time). As of May 31, he owned74,802 shares of common stock.y Daryl Hill, senior vice president, Asia-Pacific, sold 60,553 shares ofstock at prices ranging from $40.50 to $46. The stock was worthapproximately $2.8 million (60,200 of the shares were sold in May).The shares sold represented 86 percent of Hill's total direct holdings onDec. 31, 1993. As of May 31, he owned 10,141 shares outright.y Dennis Fenton, senior vice president of sales and marketing sold22,421 shares of stock at prices ranging from $42.25 to $46, earning atotal of $988,963 (11,213 of the shares were sold in May). The sharessold represented 45 percent of Fenton's total direct holdings on Dec.31, 1993. As of May 31, he owned 27,515 shares outright.y Daniel Vapnek, senior vice president of research, sold 19,600 sharesof stock in May at prices ranging from $43.50 to $46.25 for a total of$877,500. The shares sold represented 71 percent of Vapnek's directholdings on Dec. 31, 1993 (he had options and warrants to purchase anadditional 324,425 shares at that time). Vapnek's direct holdings as ofMay 31 were not available.y N. Kirby Alton, senior vice president of therapeutic productdevelopment, sold 18,000 shares of stock in May at around $46 for atotal of $833,150. The shares sold represented 45 percent of Alton'sdirect holdings on Dec. 31, 1993. Alton's direct holdings as of May 31were not available.In addition to the five executive officers named above, Linda Wudl,Amgen's vice president for quality assurance filed documents to sell4,180 shares and Lowell Sears, former senior vice president, Asia-Pacific, sold 14,114 shares.According to Amgen's vice president of government and publicrelations, Peter Teeley, all officers in the company participate in aquarterly program in which stock is sold automatically. "This happensall the time, there's nothing at all unusual about it," said Teeley.Insider Selling Sends Negative SignalGreg Brown, an analyst at Vector Securities International in Deerfield,Ill., said insider selling at the highest levels of a company sends a"negative signal.""The basic tenet is, if you see insiders buying you should buy and ifyou see them selling you should sell because they know more than youdo," he said.However, Amgen officials told Vector analysts that Binder's unusuallyhigh volume of selling was due to the purchase of a second home indowntown Los Angeles. Brown's colleague, analyst Al Beardsley saidthat his firm sees no reason to change its current "buy" rating and nocause for alarm about Amgen. "We don't see any reason for Binder tobe dumping the stock other than a one-time need for funds," he said.And Brown pointed out that some biotech insiders are buying, notselling. For example, after San Diego-based Amylin PharmaceuticalsInc.'s stock dropped on clinical trial news in June, directors andofficers personally bought 35,000 shares of the stock on the openmarket. "These types of purchases reinforce the commitment ofmanagement to the company's story," said Brown, referring to Amylin.CDA/Investnet's Gabele said what drew his attention about Amgenwas not just Binder's selling, but the selling by at least four otherofficers in the same time frame. He said that the purchase of a homewas "certainly a fair explanation" for a $5 million sale of stock butadded that companies routinely use the "source of funds" explanationwhen queried about large stock sales."I still think this is a situation worth keeping an eye on. Some peopleare so eager to own stock in a company they mortgage their home tobuy it," said Gabele. "Here we have someone selling the stock topurchase the home, I guess that suggests that real estate may be thebetter investment." n

-- Lisa Piercey Washington Editor

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