The idea of buying a stock for less than $1 and watching it soar is the dream of all investors. A little money in, a lot of money out. Unfortunately, like a princess looking for her prince, you have to kiss a lot of toads before finding a frog.
Of course, there is no system that separates frogs from toads, but one of the ways we try to narrow the field is through insider buying. Like famed mutual manager Peter Lynch said, insiders buy for one reason, to make money.
Celularity Inc. (CELU) Chief Executive Officer (CEO) Robert Hariri has almost doubled his $2.9 million investment made on September 29, 2023. The CEO bought 18,422,124 shares at 16.2 cents per share. It wasn’t Hariri’s first buy, but it was by far his biggest commitment. Back in November of 2022, he bought 90,000 shares between $1.71 and $1.74, investing $155,175. (1)
The combined transactions equal 18,512,124 shares for a total of $3,139,469, bringing the CEO’s cost average to 16.9 cents per share. CELU last traded at 29.76 cents, as of the close on Friday, October 13, 2023.
Although Hariri’s investment has done well already, Wall Street believes there could be more, a lot more to come. The Street has a one-year price target of $2.50, which is slightly north of the 52-week high of $2.464. (2)
Celularity is a clinical stage, gene editing biotechnology company focused on cellular and regenerative medicine by developing allogeneic cryopreserved off-the-shelf placental-derived cell therapies, including therapeutic programs using unmodified natural killer (NK) cells, genetically modified NK cells, T-cells engineered with a CAR (CAR T-cells), and mesenchymal-like adherent stromal cells (MLASCs). These therapeutic programs target indications in cancer, infectious and degenerative diseases.
According to Precedence Research, “The global gene editing market size was estimated at USD 6.94 billion in 2022 and it is expected to surpass around USD 29.93 billion by 2032, growing at a CAGR of 15.73% during the forecast period 2023 to 2032.” (3)
The company has a few Biomaterial products on the market:
- Biovance: Intact, natural extracellular matrix that provides a foundation for the wound regeneration process and acts as a scaffold for restoration of functional tissue.
- Biovance 3L: a trilayer human amniotic membrane product focused on the ocular and surgical markets.
- Interfyl: human connective tissue matrix used by a variety of medical specialists to fill soft tissue deficits resulting from wounds, trauma, or surgery.
But it will be its clinical treatment pipeline that will likely determine Celularity’s destiny. At the moment, they have seven potential treatments early in the approval process. (4) As a result, the stock’s price will be news dependent as CELU’s treatments navigate the approval process, which usually means a lot of volatility.
OVERALL: Industry trends are positive for Celularity Inc. (CELU). However, emerging biotechnology companies have a high strikeout rate. With that being said, all it takes to go from a toad to a prince is one approval in the spaces CELU is exploring.
Celularity is only for speculative investors that can afford to lose money as the stock will likely be subject to big price swings based on news releases. Shareholders should have a long-term time horizon of at least two years, probably more.
1 – https://www.secform4.com/insider-trading/1752828.htm
2 – https://finance.yahoo.com/quote/CELU?p=CELU
3 – https://www.precedenceresearch.com/gene-editing-market#:~:text=The%20global%20gene%20editing%20market,of%20revenue%20share%20in%202022.
4 – https://celularity.com/pipeline/