Recent
Form 4 filings with the U.S. Securities and Exchange Commission indicate that
the management team of International Stem Cell Corporation (OTCQB: ISCO) is
bullish on the company. Form 4 is a Statement of Changes of Beneficial
Ownership of Securities which every officer, director or holder of 10 percent
(insiders) must file to report the acquisition or disposition of a company’s
non-derivative and derivative securities. Five Form 4s filed at the end of June
this year report purchases of 239,534 shares. Things appear to be looking up at
ISCO. Could it be the imminent start of clinical trials that has made insiders
so sanguine?
The
term ‘insider trading’ has come to mean the illegal practice of using
information, not available to the public, to execute trades. However, it is
neither immoral nor illegal for insiders to trade. So how can we tell when
insiders are trading on private information? A lot depends on the
circumstances. Sometimes it may be obvious; sometimes it is not. Therefore, to
increase transparency, the SEC requires that share purchases by insiders be
made public.
Previously,
a Form 4 filing had to be made by the 10th day of the month following the
actual transaction. Now, the Sarbanes-Oxley Act of 2002 mandates that a Form 4
must be filed electronically via EDGAR within two business days of each
transaction. With regard to sales of shares by insiders, there may be further
filing requirements, perhaps because share sales may signal adverse
circumstances. A Form 144 must be filed by any insider (or outsider), who
intends to sell more than 500 shares or $10,000 worth of restricted,
unregistered securities within the next 90 days.
Share
purchases by insiders, typically, signal good things ahead. Since insiders know
more about their company, they can spot valuation anomalies in the market.
Roger Martin, dean of the University of Toronto’s Rotman School of Management
has said that, in mapping out an investment strategy, insider trading ‘is about
the only thing I would pay attention to’. Prof. Martin is the co-author, with
A.G. Lafley, of the best-selling Playing to Win: How Strategy Really Works that
‘outlines the strategic approach Lafley, in close partnership with… Martin,
used to double P&G’s sales, quadruple its profits, and increase its market
value by more than $100 billion’.
Backing
that up is this Investopedia entry (http://dtn.fm/A3pAv):
‘Nejat
Seyhun, a renowned professor and researcher in the field of insider trading at
the University of Michigan found that when executives bought shares in their
own companies, the stock tended to outperform the total market by 8.9% over the
next 12 months. Conversely when they sold shares, the stock underperformed the
market by 5.4%.’
Widespread
share purchases by managements across the board are sure signs of a rising
market. The Financial Times cites Ben Silverman, research director of
InsiderScore, which tracks insider trades:
“…
in the past 30 years, there has been no time when the market bottomed and
rallied when it wasn’t preceded by a critical mass of insider buying”. As the
saying goes: actions speak louder than words.
International
Stem Cell Corporation recently published the results of a 12-month preclinical,
non-human primate study. The data demonstrates the safety and efficacy of the
company’s proprietary ISC-hpNSC® readily expandable neural stem cell derived
treatment of Parkinson’s disease. The results of the study were published in
the academic journal Cell Transplantation and end the preclinical stage of
ISCO’s Parkinson’s disease program. The data provides further evidence that
parthenogenetic neural stem cells can be effective in treating the symptoms of
Parkinson’s disease and, along with the previously revealed safety data, formed
the basis of ISCO’s application to the Australian regulatory authorities to
move this program to the clinical stage.
The
Phase I clinical study is a dose escalation safety and preliminary efficacy
study of ISC-hpNSC®, intracranially transplanted into patients with moderate to
severe Parkinson’s disease. The open-label, single center, uncontrolled
clinical trial will evaluate three different dose regimens. A total of 12
participants with moderate to severe Parkinson’s disease will be treated.
Following transplantation, the patients will be monitored for 12 months at
specified intervals, to evaluate the safety and biologic activity of
ISC-hpNSC®. PET scans will be performed at baseline, as part of the screening
assessment, and at six and 12 months after surgical intervention. Clinical
responses compared to baseline after the administration of ISC-hpNSC® will be
evaluated using various neurological assessments such as the Unified Parkinson
Disease Rating Scale (UPDRS) and the Hoehn and Yahr rating scales. The study
will be performed at Royal Melbourne Hospital in Australia.
For
more information, visit www.internationalstemcell.com
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MissionIR is committed to connecting the investment community with companies that have great potential and a strong dedication to building shareholder value. We know our reputation is based on the integrity of our clients and go to great lengths to ensure the companies represented adhere to sound business practices.
Sign up for “The Mission Report” at www.MissionIR.com
Please see disclaimer on the MissionIR website http://www.missionir.com/disclaimer.html
