Relay Therapeutics Director Sells $300,000 Worth of Shares. Here's Why Investors Shouldn't Panic.

Chief Corporate Development Officer Peter Rahmer disclosed the sale of 40,529 shares of Relay Therapeutics (NASDAQ:RLAY) in multiple open-market transactions on Oct. 28 and Oct. 29, 2025, as detailed in the SEC Form 4 filing. The sale was worth a combined $299,900 and nearly half of it was due to company policy regarding employee stock compensation.

Transaction summary

Transaction value is based on the SEC Form 4 weighted average purchase price of $7.40; post-transaction value reflects the market close price on Oct. 29, 2025.

Key questions

What proportion of Peter Rahmer's direct holdings did the transaction represent?
The 40,529 shares sold represented approximately 10.72% of direct holdings before the transaction as of Oct. 29, 2025, indicating a significant reduction in ownership for this event relative to typical activity.

How does the trade size compare with recent selling activity?
This transaction was materially larger than the recent median sell size of 12,103 shares for Rahmer, and above the historical median of 1,352 shares per sale.

What is the context for the sale and how does it relate to capacity?
Direct holdings declined by approximately 34% from April 29, 2024, to Oct. 29, 2025.

What price context surrounded the sale and what is the current valuation?
Shares were sold at an average price of $7.30 per share on Oct. 28 and $7.50 per share on Oct. 29, 2025, with the stock closing at $7.40 on Oct. 29, 2025, and at $7.14 as of Nov. 2, 2025. The post-transaction direct stake was valued at approximately $2.47 million as of the market close on Oct. 29, 2025, with a one-year total return of 23.9% on a calendar year basis as of the transaction date.

Company overview

* 1-year performance calculated using Oct. 29, 2025, as the reference date (calendar year basis; 22.26% one-year total return).

Company snapshot

Relay Therapeutics is a clinical-stage biotechnology company that uses advanced computational modeling to accelerate precision drug discovery in oncology and genetic diseases. The company's strategic collaborations and proprietary platform position it to address high-value therapeutic targets with differentiated small molecule candidates. Relay focuses on innovative, structure-based drug development for targeted therapies.

The company's pipeline includes RLY-4008 (FGFR2 inhibitor), RLY-2608 (PI3Ka inhibitor), and RLY-1971 (SHP2 inhibitor), with a focus on targeted oncology and genetic disease indications.

Its business model centers on developing precision small molecule therapeutics, with revenue derived from collaborations, licensing agreements, and potential future product commercialization.

Foolish take

Rahmer sold shares of Relay Therapeutics on two days in October. According to the SEC filings, he sold slightly more than 19,000 shares on Oct. 28 to cover his income tax withholding obligations upon the vesting of almost 50,000 shares of restricted stock units (RSUs) the day before. This means he had no discretion over the sale, which was transacted according to the company's policies regarding RSUs. Rahmer sold a little more than 21,000 shares the following day.

While it can be helpful to monitor the buying and selling activity of company insiders, this is a good reminder that sometimes insiders sell stocks for policy or bookkeeping reasons, and not because they've lost conviction in the company. According to data from Whale Wisdom, six directors, including Rahmer and President and CEO Sanjiv Patel, still hold significant stakes in Relay. Insider buy-in can be an important indicator that management's priorities are aligned with those of shareholders.

Relay released its latest earnings results on Nov. 6, announcing some improved financials, but missing analyst estimates for revenue. It also announced some changes to its board of directors. Investors should continue to monitor its clinical progress in the oncology and genetic disease treatment areas and keep an eye out for major shake-ups in its management.

Glossary

Form 4: A required SEC filing disclosing insider transactions in a company's securities.
Open-market transaction: Buying or selling securities on a public exchange rather than through private arrangements.
Direct ownership: Shares held personally by an individual, not through trusts or indirect accounts.
Weighted average purchase price: The average price paid per share, weighted by the number of shares in each transaction.
Median sell size: The middle value in a series of share sale amounts, used to show typical transaction size.
Insider trading: Buying or selling a company's stock by individuals with access to nonpublic, material information about the company.
Clinical-stage: Refers to a company developing drugs that are currently being tested in human clinical trials.
Pipeline: The portfolio of drug candidates a biotechnology company is developing.
FGFR2 inhibitor: A drug designed to block the FGFR2 protein, potentially treating certain cancers.
PI3Ka inhibitor: A drug targeting the PI3K alpha enzyme, often involved in cancer cell growth.
SHP2 inhibitor: A compound that blocks the SHP2 protein, a target in cancer therapy.
TTM: The 12-month period ending with the most recent quarterly report.

Sarah Sidlow has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.