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Billionaires James Flynn, David Abrams, Among the Elite Investors Buying These 4 Stocks Last Week

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Individual investors might find hedge fund investing quite expensive, considering the 2-and-2o fee structure most hedge funds employ. However, mimicking what successful hedge fund managers do comes at no cost at all. For that particular reason, the Insider Monkey team explores dozens of filings submitted with the SEC on a daily basis and identifies those filings that might offer beneficial insight for investors. With that in mind, let’s proceed with a discussion of four recent filings submitted by Jeremy Green, James E. Flynn and two other hedge fund managers monitored by Insider Monkey.

We believe that imitating hedge funds and other large institutional investors can be helpful in identifying stocks capable of outperforming the broader market. Through extensive research that covered portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see more details here).

According to a Form 4 filing, Jeremy Green’s Redmile Group LLC bought 300,000 shares of Array Biopharma Inc. (NASDAQ:ARRY) last Wednesday at prices that ranged from $3.10 to $3.28 per share, boosting its overall holding to 19.15 million shares. The freshly-upped stake accounts for 13.43% of the company’s outstanding common stock. Redmile Group had already purchased an additional 1.0 million shares of Array Biopharma since the beginning of 2016 before the purchase in question. Array Biopharma focuses on the development of targeted small molecule drugs for the treatment of patients diagnosed with cancer. The company is currently conducting three pivotal trials of binimetinib and/or encorafenib: COLUMBUS (encorafenib in combination with binimetinib in BRAF-mutant melanoma patients), NEMO (binimetinib in NRAS-mutant melanoma patients), and MILO (binimetinib in low-grade serous ovarian cancer patients). Array Biopharma Inc. (NASDAQ:ARRY)’s NEMO and COLUMBUS Phase 3 studies finalized patient enrollment in April 2015, and the company anticipates a projected regulatory filing of binimetinib in NRAS melanoma during the first half of 2016 along with a projected filing of binimetinib in combination with encorafenib in BRAF melanoma in 2016.

Having said that, 2016 is an event-heavy year for Array Biopharma, so investors should keep a close eye on the company’s developments. Meanwhile, the stock has lost nearly 24% since the beginning of 2016 and is down by 54% over the past year, so investors might find great entry points at the moment. 22 hedge funds tracked by Insider Monkey had stakes in the company at the end of the third quarter, accumulating approximately 41% of its shares. Samuel Isaly’s Orbimed Advisors is also bullish on Array Biopharma Inc. (NASDAQ:ARRY), holding 10.06 million shares as of September 30.

Jeremy Green
Jeremy Green
Redmile Group

In a freshly-amended 13G filing, James E. Flynn’s Deerfield Management reported owning 6.67 million shares of XenoPort Inc. (NASDAQ:XNPT), which constitute 10.55% of the company’s outstanding shares. The healthcare-focused investment firm reported an ownership stake of 3.45 million shares through its 13F filing for the July-to-September period. The biopharmaceutical company is primarily focused on the commercialization of HORIZANT, which is approved by the FDA for two indications: the treatment of primary restless legs syndrome, and the management of postherpetic neuralgia. XenoPort Inc. (NASDAQ:XNPT) has also been working with the National Institute on Alcohol Abuse and Alcoholism, known as NIAAA, to develop HORIZANT as a treatment for patients with alcohol use disorder, or AUD. NIAAA is currently undertaking the AUD clinical trial of HORIZANT, and XenoPort believes that positive results from this trial will most likely enable the company to file a supplemental New Drug Application for HORIZANT as a treatment for AUD. In the meantime, XenoPort reported net product sales of $25.82 million for the nine months that ended September 30, up from $13.53 million reported for the same period of the prior year. The shares of XenoPort are 10% in the red thus far in 2016, and are down by 43% over the past one-year period. A total of 14 smart money investors in our system were long the stock on September 30, stockpiling slightly more than 38% of its shares. Baker Bros. Advisors, managed by Julian Baker and Felix Baker, owns 6.51 million shares of XenoPort Inc. (NASDAQ:XNPT) as of the end of the third quarter.

James E. Flynn
James E. Flynn
Deerfield Management

The next page of this article discuss two other filings submitted by widely-known hedge fund firms tracked by Insider Monkey.

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