Why does the management of pharmaceutical companies sell shares?
Five executives of COVID-19 vaccine companies sold several hundred million dollars worth of stock
The news about the sale of shares of such companies as Pfizer, Moderna, Novavax raises questions about the advisability of such a step in the midst of the global health crisis.
The day pharmaceutical giant Pfizer announced preliminary data that the coronavirus vaccine was 90% effective, CEO Albert Burla sold stock worth $5.6 million USD.
According to Pfizer, there was nothing illegal about it: the sale was conducted in accordance with the rules that allow company executives to sell shares according to predetermined criteria, on a certain day or at a predetermined price in order to avoid any suspicion.
In the same pattern, several Moderna executives have sold more than $100 million USD worth of stock in recent months.
This company has not put a product on the market since 2010, but the federal government has pledged to pay it up to $2.5 billion USD if the vaccine proves effective.
Since the beginning of the year, Moderna stock has risen from $19 USD to $90 USD.
On Aug. 18, Novavax's CEO, in turn, sold $4.2 million USD worth of stock. This came just over a month after the announcement that the company would receive $1.6 billion USD in government financing.
The U.S. Accountability Office, a nonpartisan taxpayer advocacy group, estimated that from the start of the federally coordinated vaccine effort, which began May 15, through Aug. 31, officials at five pharmaceutical companies earned more than $145 million USD in stock sales.
One thing that is not clear is why CEOs are selling shares now, when the successful launch of vaccines and the corresponding growth of securities are only months away.
