Peter Kolchinsky’s RA Capital Management Bet on $GNTA

Peter Kolchinsky’s RA Capital Management revealed on October 5th that it initiated a brand new position of 42.93 million shares in Genta Incorporated (GNTA). Based on the firm’s 13G on October 5th, RA Capital Management now has 9.99% stake of GNTA’s total outstanding shares. According to Insider Monkey’s hedge funds tracking list, no hedge fund ever had GNTA in portfolio before. GNTA was priced at about $0.5 in January, but in the second quarter the stock dropped to $0.02 when the company could not meet the net tangible asset criteria required for listing on the Nasdaq market. On September 2nd, the stock went down to $0.01. Peter Kolchinsky might regard this as an opportunity to double his investment. It is possible that he made several large purchases before September 9th at $0.01. However, there was no news about GNTA since the end of September. The hope for GNTA’s recovery is still slim.

Peter Kolchinsky is the co-founder and general partner of RA Capital Management, LLC. He graduated from Harvard with a Ph.D. in virology and has been investing in healthcare sector since 2002. He successfully turned his initial $4 million investment into $13 million by 2003.

Genta Inc. is a biopharmaceutical company, which mainly develops medicine and treatment for cancer and related diseases. It consists of two major programs: DNA/RNA Medicines and Small Molecules. Genta Inc. is facing a sever debt problem this year due to its heavily loaded with debts balance sheet. The company was founded in 1988 and is based in Berkeley Heights, New Jersey.