Investors in Greenwich Lifesciences (NASDAQ:GLSI) have been treated to a volatile ride in the last few weeks. Some of that is due to the company’s anticipated release of results in a key clinical trial and some of it was due to some insider buying that was taking place with the stock.
Greenwich Lifesciences is a “clinical-stage biopharmaceutical company focused on the development of an immunotherapy to prevent breast cancer recurrences in patients who have previously undergone surgery.”
Cancer immunotherapy is a relatively recent advancement in cancer treatment. According to Greenwich Lifesciences, the intent of cancer immunotherapies is to “stimulate the body’s natural immune system to selectively fight cancer cells and/or prevent cancerous tumors.”
The company was scheduled to release results from its Phase 2 clinical trial at the American Association of Cancer Research (AACR) Annual Meeting in April 2021. In advance of the meeting (from April 1 to April 9), GLSI stock jumped 54%.
Sell the News?
At the meeting, the company announced: “statistically significant Phase IIb clinical trial data.” That data shows that after median 5 years of follow-up, breast cancer patients treated with the company’s immunotherapy had no cancer recurrences (if fully immunized), no reported serious adverse effects, and a well-tolerated safety profile.
A 100% disease-free survival rate, with minimal side effects and high confidence of safety is a trifecta that should have sent GLSI stock soaring even higher. Instead the stock has given up most of its gains.
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True this could be a case of traders selling the news after a nearly 50% run-up. That’s not unusual particularly for a pre-revenue company. And Greenwich Lifesciences only went public in September 2020. Even with the pullback, shareholders are sitting on a gain of over 600%.
Who is Buying Shares?
Another likely reason for the selloff is that Greenwich Lifesciences CEO, Snehal Patel, bought 2,700 shares of GLSI stock. Insider buying of this type is entirely legal, of course. And in the case of Patel, this also appears to be part of a regular pattern. The CEO bought 2,000 shares of the stock back in November.
With that said, insider buying, particularly by a company’s CEO, is generally a bullish signal. Executives may have many reasons to sell. They only have one reason to buy. In this case, Patel likely knew that the company was going to report strong Phase II results.
However, it only causes the share price to go up if the insider buying (which removes shares from the market) is met with retail demand. In the case of GLSI stock volume is down significantly which is causing the stock to drop. This is particularly natural for a stock like GLSI which has a very low float that is only around 1.69 million shares as of this writing.
What to Do With GLSI Stock?
At this point, it doesn’t look like investors should put too much weight on the insider buying. The larger story for a company like Greenwich Lifesciences is how soon they can get their immunotherapy to market. The company released its 8-K on April 14.
The company is anticipating beginning its Phase 3 clinical trial later this year. The trial is expected to take 2.5 years. And there is a possibility that the company could submit an application for a Biologics Licensing Application (BLA) to the FDA halfway through the trial. The hope would be to get conditional marketing approval of GP2.
Even in that scenario, the company is not likely to generate revenue until late2023 at the earliest. And be advised that this is the company’s only product at this time. There is no other pipeline.
On the other hand, the one analyst that has rated GLSI stock gives it a buy rating with a $75 price target. That’s a pretty bullish signal and reflects the promise of the company’s cancer immunotherapy. It also perhaps lends itself to the belief that the Biden administration may devote more resources to cancer research. That presumption is being aided by the president’s first budget proposal that contains $6.5 billion for the creation of a new agency focused on accelerating the development of treatments for diseases such as cancer.
Companies in This Article:
| Company | Current Price | Price Change | Dividend Yield | P/E Ratio | Consensus Rating | Consensus Price Target |
|---|
| Greenwich LifeSciences (GLSI) | $12.89 | -1.2% | N/A | -18.41 | Buy | $36.00 |
Experience
Chris Markoch has been an editor & contributing writer for InsiderTrades.com since 2018.
Areas of Expertise
Value investing, retirement stocks, dividend stocks
Education
Bachelor of Arts, The University of Akron
Past Experience
InvestorPlace
