Consonance Capital Management is a New York based hedge fund established in 2005, managed by Mitchell Blutt MD. The firm usually invests in the lower middle market, in value stocks of small and mid-cap companies, focusing on the healthcare sector (payors, pharmaceutical, specialty distributors, and device manufacturers). CEO Mitchell Blutt uses his medical training and knowledge to identify attractive investment opportunities, companies with potential, within this segment. Before founding Consonance Capital, Mr. Blutt worked as Executive Partner at J.P. Morgan Partners.
A few days ago, the fund filed a Form 13F at the SEC, disclosing its long equity positions as of March 31 2014. It declared holding 37 different positions, all of them in the healthcare sector. Newcommers in the portfolio were represented by 10 of these holdings, and another 14 saw the fund increase its stakes over the quarter. Let’s take a closer look at the top holdings in this portfolio, valued at more than $672 million, and some of the moves that took place over Q1.
Mr. Blutt’s top position remained the same: United Therapeutics Corporation (NASDAQ:UTHR). In fact, this $4.8 billion market cap biotechnology company saw the fund’s stakes increase by 15% over Q1. Consonance now owns 669,690 shares of the company, worth more than $67 million, which accounts for more than 9% of the total value of its equity portfolio. This makes it the second largest hedge fund shareholder, only trailing William Leland Edwards’ Palo Alto Investors, which owns 1.1 million shares.
The second place was occupied by a new stock in Consonance’s equity portfolio: Myriad Genetics, Inc. (NASDAQ:MYGN), a $2.5 billion market cap company engaged in the discovery and commercialization of transformative tests which assess a person’s risk of developing disease, guide treatment decisions and assess risk of disease progression and recurrence. Over the first quarter, Mr. Blutt’s fund acquired 1.74 million shares, valued at approximately $58 million. However, this stake becomes quite small when compared to Royce & Associates’. The fund managed by Chuck Royce owns about $314 million in the company’s stock.
Furiex Pharmaceuticals Inc (NASDAQ:FURX) is the only one of Consonance’s top five positions for Q1 that saw a decrease in its stakes. However, the bet placed on this $1.1 billion market cap drug development collaborate company is still quite big: 616,495 shares, worth about $64 million. This position makes Consonace the largest hedge fund shareholder at the company. Second in rank, with about half the shares (376,365), is Israel Englander’s Millennium Management.
Back to bullish moves, we have Enanta Pharmaceuticals Inc (NASDAQ:ENTA), a $716 million market cap research and development focused biotechnology company. In its last 13F, Consonance disclosed ownership of 1.25 million shares (up 47% in relation to Q4), valued at roughly $48 million. Once again, Mr. Blutt’s fund is the company’s largest hedge fund stockholder
Finally, there’s BioScrip Inc (NASDAQ:BIOS), a $505 million market cap provider of home infusion and other home healthcare services. Over the quarter, the fund acquired 1.1 million shares, and now owns more than 5 million of them. This position, worth about $37 million, makes of the fund, yet again, the largest hedge fund investor, trailed, for a second time, by Englander’s Millennium Management, with 2.1 million shares.
Disclosure: Javier Hasse holds no position in any stocks mentioned.