In a series of transactions, entities associated with Vivo Capital have sold a significant portion of their holdings in Terns Pharmaceuticals, Inc. (NASDAQ:TERN), a biopharmaceutical company. The sales, which took place between April 1 and April 3, 2024, amounted to a total of approximately $2.8 million.
The shares were sold at prices ranging from $6.20 to $6.99. The transactions were carried out under a pre-arranged trading plan, which allows insiders to sell shares over a predetermined period of time, providing an affirmative defense against accusations of trading on nonpublic information.
Vivo Opportunity Fund Holdings, L.P., Vivo Capital Fund VIII, L.P., and Vivo Capital Surplus Fund VIII, L.P. were the entities involved in the sales. These entities are associated with Vivo Capital, a healthcare-focused investment firm, and are reported to be ten percent owners of Terns Pharmaceuticals.
The entities sold shares at weighted average prices, with individual transactions occurring at various prices within the given ranges. For instance, on April 1, Vivo Opportunity Fund Holdings, L.P. sold 136,255 shares at an average price of $6.99 per share, while on April 3, they sold 103,870 shares at an average price of $6.20 per share.
These sales are part of a series of planned disposals of Terns Pharmaceuticals stock by Vivo Capital entities, as outlined in their Rule 10b5-1 trading plan established in late 2023. Following these transactions, the entities continue to hold a substantial number of shares in the company, but the exact remaining holdings were not disclosed in the filing.
Investors often monitor insider sales for insights into executives' and large shareholders' perspectives on the company's future performance. However, it is important to note that such sales do not always indicate a lack of confidence in the company and can be motivated by various factors, including diversification of personal investments.
The reporting persons have disclaimed beneficial ownership of the sold securities except to the extent of their pecuniary interest therein. This disclaimer is a routine legal statement that indicates the reporting person does not claim ownership for purposes other than financial gain and is not necessarily an indicator of the reporting person's view of the company's prospects.
InvestingPro Insights
Amidst the recent transactions by Vivo Capital entities, Terns Pharmaceuticals, Inc. (NASDAQ:TERN) presents a mixed financial landscape. With a market capitalization of approximately $429.29 million and a price to earnings (P/E) ratio standing at -4.79, the company's valuation metrics suggest investor skepticism about its current profitability. The adjusted P/E ratio over the last twelve months as of Q4 2023 slightly improves to -4.3, yet still indicates that the company is not generating earnings to support its share price.
InvestingPro Tips indicate that Terns Pharmaceuticals holds more cash than debt on its balance sheet, which can be a sign of financial stability. However, another tip reveals that the company is rapidly burning through its cash reserves, which could raise concerns about its long-term financial health. Additionally, the stock price has seen a significant decline over the last week, with a -8.54% one-week total price return, and has fared poorly over the last month, with a -19.35% return.
Investors should note that analysts have revised their earnings upwards for the upcoming period, which may signal potential improvements in the company's financial performance. Yet, the company does not pay a dividend to shareholders, which might deter income-focused investors. On the brighter side, Terns Pharmaceuticals' liquid assets exceed its short-term obligations, suggesting it can cover its immediate liabilities.
For investors seeking a more comprehensive analysis, there are additional InvestingPro Tips available on Terns Pharmaceuticals. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable insights.
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