"George Rathmann has made more money for people in biotechinvesting than probably the aggregate of the other players inthe industry"
-- Peter Drake, Vector Securities International Inc.
By Steve UsdinBioWorld Washington Bureau
George Rathmann, a founder and former chairman, presidentand chief executive officer of Amgen Corp., and now founder,chairman, president and chief executive officer of Icos Corp.,is perhaps biotech's most successful executive.
He also has a problem other executives wish they had:diversifying the financial rewards for his success in a prudentmanner without sending the wrong signals to Wall Street.
In the two weeks between Aug. 14 and Aug. 21, Rathmann sold150,000 shares of Amgen stock for $145.88 to $149.68 pershare, grossing about $22 million.
Rathmann, who is still on Amgen's board, retains holdings ofnearly 1.6 million shares following the 3-for-1 split in Amgenstock that took effect Sept. 11. The company currently hasabout 129.1 million shares outstanding.
The stock (NASDAQ:AMGN) closed at $56.50 on Friday, up morethan 10 percent from the time Rathmann sold, after adjustingfor the split.
Contacted by BioWorld, Rathmann said, "Virtually everything Iown is tied up in Amgen stock."
The decision to sell "had nothing to do with the price of Amgenstock at the time of the sale," said Rathmann. "It's really quiteimportant for prudent estate planning when your assets are allin one stock that you diversify."
According to Amgen, Rathmann acquired the stock while hewas at the Thousand Oaks, Calif., company, and he did notreceive any additional options or payments in stock when herelinquished operating responsibilities in 1988.
Rathmann said executives have personal or professionalreasons to sell stock in corporations they are managing. Eventhough these sales have no relationship to the value of thecompany or to the executive's confidence in its future, he said,they can send unintended and possibly incorrect signals to theinvestment community.
He said he has always sold shares in large blocks to avoid theappearance of "dumping" the stock over time, and he has neversold more than a quarter of his holdings at one time.
Ed Brown of Vickers Stock Research Corp. of Huntington, N.Y.,which publishes the Weekly Insiders Report newsletter, said itwas unlikely Rathmann's trades would be interpreted asreflecting the underlying value of the the stock.
"People who look at insider trades will understand what thismeans, that it is for estate planning or whatever," Brown said.
(c) 1997 American Health Consultants. All rights reserved.