His bet appears to be paying off. As I write this, SGP is the only major American drug stock that’s trading higher. albeit just a fraction. Nonetheless, it’s the first gain for SGP this week.
In the release, which you can read in its entirety here, Hassan is quoted as saying, “The media interpretations of the top-line ENHANCE trial results, and the resulting stock price reaction, have been deeply troubling. I firmly believe in VYTORIN and ZETIA.” Vytorin is a combo of Zocor and Zetia. “Our mission is ‘To earn trust, every day’ and this personal stock purchase reflects my faith that, together, our 50,000 dedicated Schering-Plough employees can accomplish that mission,” Hassan said.
Interestingly, the press release says Hassan wanted to literally buy the stock yesterday when it closed at $21.62. But the lawyers told him it’d be better to wait until after the company reports earnings on February 12th and researchers present the detailed data from ENHANCE at the American College of Cardiology conference in late March.
Hassan bought more than $4.5 million worth of SGP shares more than four years ago. Given that he has to wait awhile to make this purchase, this strikes me as a smart PR ploy to try to move the needle in the meantime on the beaten down shares.
Credit Suisse big pharma analyst Catherine Arnold calls this week’s selloff a “frenzy” and is telling clients in a research note entitled, “Vytorin News Overdone,” to follow Hassan’s lead. She says, “…investors are overestimating the impact this study will have on Vytorin sales.” CS has done investment banking for MRK and SGP and wants to do more. And Arnold or someone on her team lives with someone who works at Schering.