What happened
Shares of clinical-stage biotech company ALX Oncology Holdings (ALXO -0.54%) fell more than 18% as of 1:15 p.m. on Thursday after a rash of insider selling by company executives. The stock is down more than 47% so far this year.
So what
ALX Oncology specializes in cancer therapies that block the CD47 checkpoint pathway, which are used by several cancers to evade immune responses. On Thursday, the company released Securities and Exchange Commission filings that showed that several executives had sold company stock on June 30. Chief Executive Officer Jaume Pons sold 3,208 shares, Chief Financial Officer Peter S. Garcia sold 887 shares, Chief Accounting Officer Shelly Pinto sold 466 shares and Chief Medical Officer Sophia Randolph sold 1,605 shares.
While insider selling is rarely seen as a positive thing, company executives often sell for various reasons that may have nothing to do with the health of the company.
Now what
The rash of selling may have had more to do with investors taking profits. ALX Oncology announced on June 26 that the European Commission (EC) had granted orphan drug designation (ODD) to evorpacept as a treatment for gastric cancer. The Food and Drug Administration (FDA) already granted ODD for evorpacept back in January.
The key for ALX Oncology will be how well evorpacept, its lead therapy, does in trials. The drug is being looked at as a combination therapy with Sanofi drug Sarclisa to treat patients with multiple myeloma, as well as several other combination therapies that include partners Eli Lilly, Merck, Tallum Therapeutics, Quantum Leap Healthcare Collaborative and Zymeworks. Evorpacept is in phase 2 trials as a combination therapy to treat head and neck squamous cell carcinoma and also to treat gastric and gastroesophageal junction cancer. As of the first quarter, the company said it had $256.2 million in cash, enough to fund operations, it said, into 2025.
