Insider Buy - Erasca (ERAS)

Background

Erasca (ERAS) is a clinical-stage precision oncology company with a mission to eradicate cancer. They focus on developing therapies that target the RAS/MAPK pathway, which is a driver in many cancers. The company has several notable clinical trials and development programs. Erasca is well-positioned with a cash runway into the second half of 2025, bolstered by a successful IPO in 2021 raising $345 million.

Which Insiders are Buying

• 12/05/2023 - Jonathan Lim (CEO) purchased $1.7m worth of shares at $1.70. He also purchased $2mm worth of shares at $2.03 in October 2023.

  • This represents a ~6% increase in his holdings.

• 12/04/2023 - Alex Casdin (Director) purchased $49k worth of shares at $2.03 and $55k worth of shares in April at $2.76 in April.

  • This represents a ~7% increase in his holdings

Jonathan Lim is a prolific and accomplished figure in the biotech industry. He’s a physician turned “ventureprenuer” and co-founded Erasca (erase cancer) in 2018.

Prior to Erasca, Dr. Lim also co-founded Ignyta, a precision oncology company, in 2011. He was also the co-founder of Eclipse Therapeutics and was the president and CEO of Halozyme Therapeutics (a $5.6bn company).

Side note: Dr. Lim joined Halozyme at a tumultuous time, when it had only 3 months of cash left on its balance sheet. During his tenure from 2003 to 2010, he grew market cap from $5 million to almost $1 billion.

Dr. Lim was a management consultant at McKinsey, Postdoc at Harvard Med School, Surgery Resident at Cornell and Sloan Kettering, B.S. and M.S. from Stanford, M.D. from McGill, and M.P.H. from Harvard.

This guy is a force to be reckoned with. You can read more about him here.

Let’s quickly take a look at Jonathan’s insider purchases at Ignyta, the previous oncology company he co-founded.

Jonathan’s insider purchases in early 2015 were followed by sharp rises in the stock price while his purchase in 2014 and 2016 were followed by a flat stock price.

Prior to Ignyta, Jonathan has only one other recorded insider purchase at Halozyme where he was CEO. He bought a small amount of shares for $8k at $1.61 in 2004. Halozyme is currently trading at ~$40 per share.

Alex Casdin’s trading history mirrors Jonathan’s trading history very closely. He also purchased stock in Ignyta three times between 2015 - 2016 before their acquisition in 2018. You can see all the trades here.

We think Erasca may be a stock worth keeping an eye on given the recent cluster insider purchases by savvy insiders.

*Funny enough, as I finished writing this, another insider purchase just came in. Start Valerie (director) just purchased $18k shares.

As always, do your own research and this is not financial advice.

Insider Sell - Planet Fitness (PLNT)

Background

Planet Fitness (PLNT) is a major American fitness center franchise, known for its approachable and non-intimidating gym environment, branded as the "Judgement Free Zone." The company caters primarily to occasional or first-time gym users, with a business model that relies on a high number of memberships, even though a significant portion of the members may not regularly attend the gym. Planet Fitness alienates some serious weightlifters due to its policies like the "lunk alarm," and restrictions on certain weightlifting exercises. Planet Fitness went public in August 2015 and continues to expand rapidly, being one of the largest and fastest-growing fitness center franchisors in the United States by number of members and locations.

Which Insiders are Selling

Chris Rondeau was the CEO of Planet Fitness for the last 10 years and has been with the company for 30 years. He was ousted as CEO in September for unknown reasons.

The stock cratered from $60 to $45 following the news, but has recovered over the last few months to $68 currently.

Today, Chris sold 50% of his total shares for $66 million… Notably, Chris is up for re-election to be CEO at the company’s 2024 annual meeting which was announced in a press release.

Yesterday, an article came out about Xponential Fitness, one of the largest boutique fitness franchises that include brands like Rumble, Stretch Lab, Pure Barre and more. Bloomberg writes about the predatory behavior Xponential and it’s CEO Anthony Geisler commit to it’s franchisees that you can read here.

I’d be remiss to not comment on the potential effects Ozempic and other GLP-1 drugs may have on the fitness market. You can read more about Ozempic’s effects on weight loss and addiction here.

There are some interesting developments going on in the franchise fitness space.

As always, do your own research and this is not financial advice.

That’s all for this week, follow us on Twitter, subscribe to our newsletter, and check out StockOcean to sign up for free alerts when your CEO sells stock.