Stocks in the biotechnology industry have been very active as of late, with companies’ shares registering significant gains. The industry jumped by 39% over the past 52 weeks and despite many experts considering that biotech stocks are currently in a bubble, investors still seem to be bullish, at least according to some of the latest filings with the Securities and Exchange Commission (SEC). Jacob Gottlieb‘s Visium Asset Management has disclosed raising its exposure to Esperion Therapeutics Inc (NASDAQ:ESPR), and Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS) in two newly amended filings with the SEC, though in another recent filing, Samuel Isaly’s OrbiMed Advisors reported further reducing its activist stake in Intercept Pharmaceuticals Inc (NASDAQ:ICPT). Let’s take a closer look at each move.
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So, let’s get back to the latest moves that hedge funds made in the biotech sector. Visium Asset Management has disclosed increasing its passive stake in Esperion Therapeutics Inc (NASDAQ:ESPR) to 1.41 million shares, from just 200,000 shares held previously. Following the increase, Mr. Gottlieb’s healthcare-focused fund owns 6.4% of the $2.0 billion company. Esperion Therapeutics Inc (NASDAQ:ESPR) is engaged in the development and sale of therapies for patients with high levels of low-density lipoprotein cholesterol. The company’s stock had a very impressive run over the last year, surging by over 500%.
Esperion Therapeutics Inc (NASDAQ:ESPR) has recently announced positive results from a mid-stage trial of its cholesterol-busting drug ETC-1002, which also helped the stock gain more ground. Last week, however, the stock dropped by more than 15% on Wednesday, amid a large sell-off that affected many biotech stocks and sparked discussions regarding a burst of the bubble. Another investor that is bullish on Esperion Therapeutics is Dennis Purcell’s Aisling Capital, which owns 2.05 million shares as of the end of 2014, the company representing its largest holding in terms of value.
In Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS), Visium also increased its stake, to 3.88 million shares from 2.0 million reported in an earlier filing. Following the acquisition of more shares, the investor holds 5.7% of the company’s outstanding stock, up from 3.2% held previously. During the fourth quarter, when Visium cut its stake in the micro-cap biopharmaceutical company by 63%, two other healthcare-focused investors added Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS) to their equity portfolios and currently rank among the largest shareholders among the funds that we track. Julian and Felix Baker’s Baker Bros. Advisors and Mark Lampert’s Biotechnology Value Fund (BFV) both initiated stakes that contain 3.20 million shares and 3.14 million shares, respectively, although both holdings amass small portions of the funds’ portfolios.
A brief look at Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS)’s stock chart shows that the stock dropped in the first 10 days of October, from around $7.00 per share to slightly above $1.00, and is currently down by 60% over the last 52 weeks amid deteriorating financial results. The decline in October came on the back of the announcement that the company’s vosaroxin drug for acute myeloid leukemia failed a Phase III test. However, analysts are optimistic about the company’s prospects and since the beginning of the year, three of them set ‘Buy’ ratings for the stock, with price targets above $4.00 per share.
Finally, let’s take a look at Orbimed Advisors’ move that involves the sale of some Intercept Pharmaceuticals Inc (NASDAQ:ICPT) shares. The fund disclosed holding 1.12 million shares, equal to 4.95% of the company’s common stock in its latest filing with the SEC, while it previously held 1.28 million, representing 5.63% of the stock. At the end of 2014, the fund owned some 1.49 million shares of Intercept, and the latest two cuts come amid the stock jumping by 90% since the beginning of the year. In addition, it is important to mention that Orbimed’s stake is activist by nature and the investor has a representative on Intercept Pharmaceuticals Inc (NASDAQ:ICPT)’s board of directors.
However, despite outstanding performance since the beginning of the year, the stock of the company is 7% in the red over the last 52 weeks. The decline came amid the company’s weak financial results, such as a net loss of $13.63 per share in 2014, versus a loss of $3.76 per share a year earlier. However, it’s easy to see why investors are bullish on Intercept Pharmaceuticals Inc (NASDAQ:ICPT), since not that long ago, in January, 2014, the company’s stock tripled within one day after a very successful trial of a liver drug. Steve Cohen of Point72 Asset Management was one of the biggest winners from that event, since his previous fund, SAC Capital, built a massive stake in the company a couple of months before. During the last three months of 2014, Mr. Cohen also raised his stake in Intercept by 300% to 300,200 shares, as disclosed in Point72’s latest 13F filing.
Disclosure: None
