ALMS

Alumis($ALMS) Executives Buy $230K in Stock After 60% Drop From IPO Price

04/03/2025 22:10

Senior executives at Alumis Inc($ALMS) have purchased significant stakes in the company at a time when the stock has fallen nearly 60% from its IPO price. According to regulatory filings, President Martin Babler acquired 15,650 shares at an average price of $6.44 on April 1, for a total investment of approximately $100,732. On the same day, board member Alan Colowick purchased 16,104 shares at $6.97, followed by an additional 2,300 shares at $7.49 the next day. Colowick's total investment amounted to roughly $129,500. These insider purchases came just a week after Alumis announced a licensing agreement with Japanese pharmaceutical company Kaken Pharmaceutical for its lead drug candidate ESK-001, news that sent the stock up about 15.5%. However, this represents only a partial recovery following a steep decline that began in early February. Alumis, a clinical-stage biopharmaceutical company developing oral therapies for autoimmune disorders, went public in June 2024, raising approximately $210 million at $16 per share. The company's flagship candidate ESK-001 is currently in Phase 3 trials for plaque psoriasis and systemic lupus erythematosus. The stock has struggled since its Nasdaq debut, closing down about 16% at $13.3 on its first trading day on June 28, 2024, and continuing a gradual decline thereafter. Particularly between mid-November 2024 and early March 2025, the stock experienced a precipitous drop, reaching a low of $3.57. Interestingly, these executive purchases represent the second major insider buying activity in Alumis's history. The first occurred immediately after the IPO on July 1, 2024, when director James B. Tananbaum and related entities including Foresite Capital purchased shares worth $40 million, while director Srinivas Akkaraju acquired $25 million in stock. Both transactions occurred at the IPO price of $16, representing significant paper losses at current levels. Recently, Alumis has been in the process of merging with another biopharmaceutical company, Acelyrin. This merger was announced on February 21, 2025, and is expected to close in the second quarter of 2025. After the announcement, private equity firm Concentra Biosciences made an acquisition offer to Acelyrin, but Acelyrin decided to proceed with the Alumis merger instead. The executive stock purchases are particularly noteworthy given this complex backdrop. The licensing deal with Kaken Pharmaceutical will provide Alumis with $40 million upfront and potential milestone payments of up to $140 million, which should positively impact the company's cash flow. Financially, Alumis currently has a market capitalization of approximately $306 million and holds $288 million in cash and short-term investments, representing a significant cash reserve. However, the company recorded a net loss of -$294 million for fiscal year 2024, with earnings per share (EPS) of -$10.38. While this pattern is expected for early-stage biopharmaceutical companies, the cash burn rate remains a concern for investors. Analysts maintain a generally positive outlook on Alumis, with a consensus rating of 'Strong Buy' from seven analysts and a 12-month price target of $28.17, representing a potential upside of 229.86% from current levels. The company's next earnings release is scheduled for May 15, 2025, with an estimated EPS of -$1.54 for the upcoming quarter. Biotech sector specialists interpret the executive purchases as a signal of confidence in the company's pipeline and strategic direction. Particularly notable is the fact that these purchases were made at prices significantly discounted from the IPO, suggesting insiders may believe the current stock price undervalues the company. However, investors should recognize that investing in clinical-stage biopharmaceutical companies is inherently high-risk. The results of Phase 3 trials for ESK-001 will be a major determinant of future stock performance, and if the merger with Acelyrin successfully concludes, the value proposition of the combined entity could change substantially.

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