Activist Alex Denner’s Sarissa Capital Bets on Ariad Pharmaceuticals Inc (ARIA), Quest Diagnostics Inc (DGX) & Others

Alex Denner’s Sarissa Capital disclosed its holdings in its latest and first 13F filings. The hedge fund has invested $267.02 million in equity portfolio and is focusing mainly on the Healthcare sector.

The hedge fund holds more than 30% of its portfolio value in Ariad Pharmaceuticals Inc (NASDAQ:ARIA). The fund has 12 million shares, worth $81.84 million. Ariad is facing difficulties since the FDA asked it to withdraw its only drug Iclusig from the market in October, 2013. It was allowed to continue the sales but to a very small group of patients. Sarissa holds a 6.2 % stake in the company and has asked to nominate several directors to the company’s board.

Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA)

The second largest holding is in Quest Diagnostics Inc (NYSE:DGX). The hedge fund holds 14% of its equity portfolio in the company, owning 700,000 shares worth $37.48 million. Quest is expected to be hit by the provisions of the Affordable Care Act. It has already lost 3% of revenues in 2013 from reimbursement changes.

The third largest holding is in Idenix Pharmaceuticals Inc (NASDAQ:IDIX). The fund has invested $30.20 million in 5.05 million shares of the company. Baupost Group, managed by Seth Klarman, also holds a substantial holding in Idenix. The fund owns 53.33 million shares equaling 35.38% of the common stock. Baupost has been granted observer rights with respect to meetings of the board of directors of the company and the committees of the company’s board of directors.

With a $23.37 million stake, which amasses 2.54 million shares, Vivus Inc (NASDAQ:VVUS) is the fourth largest holding of Sarissa. Sarissa partnered with First Manhattan to wage a proxy battle at Vivus and succeeded in replacing the company’s Chief Executive besides placing six nominees on the company’s board.

The fund has also invested $20.02 million in 400,000 shares of Merck & Co Inc (NYSE:MRK). Merck is planning to sell its portfolio of consumer brands. It has already screened the preliminary offers and is waiting for the final bids. The sale is expected to yield $10 billion to the company.

Disclosure: none

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