EyePoint's Inducement Grants: A Hiring Tool or a Signal to Sell?

The headline is straightforward: EyePoint granted 13,900 stock options to three new hires at $15.84, the closing price on January 15. This is a routine inducement grant, required by NASDAQ Rule 5635(c)(4) for hiring new employees. In fact, this follows a pattern, as the company made similar grants in August and September of last year. It's a standard tool to attract talent, not a signal about the stock's future.

But the smart money is looking past the headline. While the company is handing out options to new recruits, key insiders are selling. In December and January, CEO Jay Duker and CFO George Elston sold shares. More telling is the move by the largest institutional holder, Cormorant Asset Management, which sold 942,240 shares at $15.70 in late December. That's a major position reduction at a price near the current level.

The contrast is stark. The company is using stock to lure new employees, while its top executives and its biggest shareholder are taking money off the table. When the people with the deepest skin in the game are selling, it often signals they see little near-term upside. The inducement grants are a hiring tool; the insider sales are a vote of confidence-or lack thereof-in the stock's trajectory.

The Smart Money Check: Who's Buying and Selling?

The filings tell a clear story. While the company is doling out options to new hires, the people with the deepest skin in the game are taking money off the table. In December, CFO George Elston sold 140,477 shares at $15.11. Just last week, CEO Jay Duker sold shares as well. This isn't a one-off. The pattern shows executives are consistently trimming their positions, even as they receive stock grants for their own roles.

The institutional picture is just as telling. The largest holder, Cormorant Asset Management, made a major move in late December, selling 942,240 shares at $15.70. That's a significant reduction of a top-10 position. More broadly, the ownership structure reveals a lack of conviction. While 306 funds hold 93.15% of shares, the average allocation is a mere 0.1766%. This is a highly concentrated but extremely thin spread of ownership. When smart money isn't betting big, it often means they see no clear catalyst ahead.

The bottom line is a mismatch. The company is using stock to attract new talent, a classic inducement. At the same time, its top officers and its biggest shareholder are selling. That's a classic signal that the alignment of interest has broken down. When the insiders are cashing out, the smart money is looking elsewhere.

The Catalysts and Risks: What to Watch

The smart money is not betting on near-term upside, but the 2026 catalysts could change that if they see conviction. The primary near-term event is the Phase 3 data readout for DURAVYU in wet AMD, expected to begin in mid-2026. This is the largest multi-billion-dollar retinal disease market, and a positive readout would be transformative. The company is on track, having completed enrollment in its pivotal LUGANO and LUCIA trials. The next major milestone is the first patient dosing in the Phase 3 DME program, expected in Q1 2026.

The key risk is the company's cash runway. EyePoint raised capital via a public offering in October 2025. While that provides a cushion, the stock's performance and the lack of institutional accumulation suggest the market is not pricing in a near-term cash need. The watchpoint is whether that changes. The smart money will be looking for any significant increase in institutional accumulation, as tracked in 13F filings, or a return to insider buying ahead of the 2026 data readouts. Right now, the pattern is the opposite: executives and major holders are selling.

The bottom line is a setup where the company is using stock to attract new talent, while its deepest insiders are taking money off the table. The upcoming clinical milestones are the only path to a reversal of this trend. If the Phase 3 data is positive, it could force a re-evaluation. But until then, the filings show where the real money is headed.