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Adage Capital, P2 Capital Raise Their Antes On Vitae Pharmaceuticals Inc (VTAE), Forrester Research Inc. (FORR)

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Phil Gross (pictured) and Robert Atchinson‘s Adage Capital Management recently added about 98,900 shares to its Vitae Pharmaceuticals Inc (NASDAQ:VTAE) holding, which now stands at 1.12 million shares and amasses about 5.14% of the company’s outstanding stock. Meanwhile, according to a separate filing with the Securities and Exchange Commission, Claus Moller‘s P2 Capital Partners raised its stake in Forrester Research, Inc. (NASDAQ:FORR), acquiring an additional 155,035 shares to take the holding to 1.13 million shares representing 6.3% of the company’s outstanding shares.

Phill Gross

The founders of Adage, Phil Gross and Robert Atchinson worked at Harvard Management Company prior to establishing their own shop in 2001. Currently, the market value of their public equity portfolio stands at a whopping $40.10 billion, with 19% of those investments in the healthcare sector. P2 Capital, on the other hand, employs a private equity approach and focuses on small-cap companies, which explains the fund’s considerably lower public equity portfolio value of $629.88 million. The technology sector represents about 33% of its portfolio.

Phill Gross And Robert Atchinson
Phill Gross And Robert Atchinson
Adage Capital Management

In the eyes of most traders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are more than 8,000 funds in operation at present, hedge fund experts at Insider Monkey look at the aristocrats of this group, around 700 funds. Contrary to popular belief Insider Monkey’s research revealed that hedge funds underperformed in recent years because of their short positions as well as the huge fees that they charge. Hedge funds managed to outperform the market on the long side of their portfolio. In fact, the 15 most popular small-cap stocks among hedge funds returned 118% since the end of August 2012 and beat the S&P 500 Index by over 60 percentage points (see the details here). This is a huge margin, which is why hedge funds’ recent purchases should be given some attention.

Adage initiated a position in Vitae Pharmaceuticals Inc (NASDAQ:VTAE) during the first quarter and has subsequently been increasing that stake. The stock price of the $321 million clinical stage biotechnology company has appreciated by about 14.5% since the end of March, including a hike of more than 80% in a single trading day earlier this month following positive Phase 1 trial results for VTP-43742, the company’s product candidate for autoimmune disorders, which include psoriasis, psoriatic arthritis, rheumatoid arthritis, multiple sclerosis, and irritable bowel disease. The drug has passed the safety and tolerability mark across a 60-fold dosage range.

Vitae Pharmaceuticals uses its unique proprietary-based drug discovery platform Contour to develop novel, small molecule drugs for diseases that have a significant unmet medical need. Besides VTP-43742 the company has a few other drugs in its pipeline as well, including VTP 34072 for type II diabetic patients, which is being developed in collaboration with partner Boehringer Ingelheim. Vitae also has a base inhibitor program for Alzheimer’s disease in place, which was also being developed in partnership with Boehringer, until the company decided to end its collaboration with Vitae in this segment. The sharp hike in Vitae’s stock price also led us to analyze the company’s future prospects for a retail investor.

Generally, Vitae Pharmaceuticals Inc (NASDAQ:VTAE) has still not been able to garner considerable support from the hedge funds we track, owing to its relative anonymity and drugs in the early stages of development, but prominent names like Israel Englander‘s Millennium Management and Steve Cohen’s Point72 Asset Management have taken a stake in the company. Their respective holdings amount to about 763,400 shares and 444,800 shares respectively.

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