Insiders Jumped Off of Amgen’s Bandwagon : Market: Thirteen officers and directors unloaded shares in the past year, a possible indication they were fearful the stock was overpriced.

Over the past year, 13 insiders at Amgen Inc.--officers and directors--sold $50.1 million of the biotechnology company’s stock at an average price of $66 a share. That’s about a third more than the stock fetches today.

Filings with the Securities and Exchange Commission show that the biggest portion of the sale of 759,790 shares came in a monthlong wave last November, when Amgen’s stock was nearing its 52-week high.

The stock’s price peaked at $78 a share in early December after languishing in the mid $50 to high $60 range most of last spring and summer.

But SEC filings also show something more striking. Since last May, only one Amgen insider added to his holdings by buying more shares of Thousand Oaks-based Amgen in the open market.

In February, Edward J. Ledder Jr., an outside director, bought 1,000 Amgen shares at $35.50 a share.

Ledder’s purchase was notable for another reason. It came the same day Amgen’s stock took a nose-dive, falling to as little as $31.75 (its 52-week low) on enormous volume in the national over-the-counter market.

At the time, Amgen and most other health-care stocks had already been stung by President Clinton’s reform plans.

But Amgen’s stock plunged another 25% the day Ledder stepped in to buy on disappointing earnings news. Amgen announced that, after four years of tremendous growth in sales and earnings, its first-quarter 1993 profits would be 10% to 15% below most analysts’ estimates.

The reason: softer-than-expected sales of Neupogen, one of Amgen’s two wonder drugs that had sent the company to the top of the biotechnology industry and made its stock beloved on Wall Street.

Lately, Amgen’s stock has recovered somewhat. It closed Monday unchanged at $41.50 a share.

Many investors closely monitor when insiders buy or sell their company’s shares, believing that such information offers valuable clues about where a stock is headed.

“Insider buying is a much better indicator of future performance than selling, since officers and directors sell for all sorts of different reasons. Maybe to buy a home or send a child to college,” said George Shirk, a research analyst at The Insiders, a newsletter in Ft. Lauderdale, Fla., that tracks insider stock trades.

Still, in Amgen’s case, “one buyer and 13 sellers over the past 12 months is very indicative that Amgen insiders were fearful of a correction, which came,” Shirk said. “They’d been telling us for a year this stock was overpriced.”

Among Amgen’s notable sellers last November was the company’s founder, George Rathmann, who resigned as chairman in 1990, and Gordon Binder, the firm’s current chief executive.

Rathmann sold $13.2 million of his shares in early November at an average price of $66 a share. Later that month, Binder unloaded $3.4 million of company stock at prices averaging $75 a share.

Rathmann, 65, said he has periodically sold some of his Amgen holdings.

“Virtually my entire estate is in Amgen stock,” he said. “I had no reason to sell based on the outlook for the company, nor was I that close to it. Every other time I’ve sold, the stock went up. Before when I was selling it was the perfect time to buy. This time it went the other way.”

In a one-sentence statement, Binder said, “I have sold small amounts of stock on a relatively steady basis for a number of years.”

A spokeswoman for Amgen pointed out that many executives at other companies lightened their stock holdings last fall, anticipating an increase in personal-income taxes under the Clinton Administration. She added that Amgen executives tend to hold large amounts of company stock, making it necessary to sell some of it from time to time to better diversify their portfolios.

Binder, along with another Amgen top executive, also sold some of his holdings a week before the unexpected earnings announcement.

On Feb. 17 and Feb. 18, Binder sold 4,000 shares at prices between $47.75 and $50.25, he reported to the SEC. The sales volume was similar in size to his others last fall. Binder still holds more than 200,000 Amgen shares.

Amgen senior Vice President N. Kirby Alton acted more aggressively to avoid the February massacre.

A few days before the announcement--with Amgen’s stock price already starting to skid--Alton sold 10,000 of his shares at $40.40, and another 10,000 shares at $47.50 a share.

Alton said he sold the stock when he did to buy some property.

The decline in Amgen’s stock value has hurt not only the company’s executives, but many other employees at the company, ranging from secretaries to scientists, whose stock options are now “underwater” because the options were granted when Amgen’s stock was selling at higher prices.

Amgen has passed out options to all of the company’s employees every year since Rathmann started the company in 1980. The number of options employees get varies according to salary grade.

Some slowdown in Amgen’s sales and earnings growth was probably inevitable.

Both of its drugs have been very successful: Epogen, which fights anemia in kidney-dialysis patients by boosting red blood cells, and Neupogen, widely used on cancer patients undergoing chemotherapy because it boosts infection-fighting white cells.

Last year, the two drugs gave Amgen profits of $358 million on sales of $1.1 billion.

But this year, Wall Street had believed that sales of Neupogen would boost those earnings by 30% or more. Instead, Amgen’s profits for all of 1993 are now only expected to climb by half that much (after excluding onetime gains and charges in 1992).

Analysts have also expressed concern that Amgen hasn’t moved fast enough to bring out a third drug.

“Insider selling is normal in the course of a maturing company, but Amgen’s problems are longer term,” said Jim McCamant, editor of Medical Technology Stock Letter in Berkeley. Amgen “doesn’t have much in the way of visible products to follow their existing products.”

For the time being, McCamant said he considers Amgen’s stock a “hold.”

But, noted Shirk, “Amgen has one of the strongest research departments in he country. So fundamentally, it looks very reasonably priced.” The stock is selling at about 17 times analysts’ estimates of the company’s 1993 per-share profits.

Shirk added that his newsletter’s ratings are a lagging indicator of how insiders are feeling about their company’s stock because officers and directors have some time to report their trades to the SEC.