Quotient Ltd (QTNT): Bihua Chen’s New Fund, Cormorant Asset Management, Triples Stake

Bihua Chen’s Cormorant Asset Management disclosed, last Thursday, that it had tripled its exposure to Quotient Ltd (NASDAQ:QTNT), from 500,000 shares held by the end of the third quarter of 2014, to 1.5 million shares, as of December 4. This position accounts for 8.94% of the company’s shares outstanding.

Cormorant Asset Management is a Boston-based healthcare hedge fund founded in 2013. Bihua Chen holds a BS in Genetics and Genetic Engineering, and an MS in Molecular Biology. Prior to founding Cormorant, Ms. Chen served as a Venture Partner at Beacon Bioventures and at Fidelity Biosciences. Before this, she worked for Israel Englander’s Millennium Management. Cormorant had an equity portfolio worth more than $486 million at the end of September 30, 2014.

Quotient Ltd (NASDAQ:QTNT) is a $186.90 million market cap commercial-stage diagnostics company reducing healthcare cost and improving patient care through the development and commercialization of tests for blood grouping and serological disease screening. According to Cormorant’s most recent 13G filing, the firm holds 1.5 million shares of Common Stock. This position, which represents 8.94% of the company’s shares outstanding, is comprised by 1.1 million ordinary shares, and warrants exercisable for 400,000 ordinary shares.

Another major institutional investor betting on Quotient Ltd (NASDAQ:QTNT) is Jacob Gottlieb’s Visium Asset Management. The fund had initiated a position in the company, with 745,671 shares, in late-June. Despite having trimmed its wager to half (327,613 shares by the end of the third quarter), Visium is still amongst the largest institutional investors in the company.

A few days ago, Quotient Ltd (NASDAQ:QTNT) announced that it had entered into agreements to issue to certain subscribers 2 million ordinary shares for $9.50 per share; and 850,000 pre-funded warrants for $9.49 per warrant, exercisable for up to 850,000 ordinary shares at $0.01 per ordinary share. Gross proceeds for this private placement should be around $27 million, and will be used for general corporate purposes, like funding the development of MosaiQ(TM). A few weeks earlier, the company had reported its financial results for the second quarter of fiscal 2015, ended September 30, 2014. Highlights include: total revenue of $4.5 million, almost flat in relation to the same quarter in 2013, and gross profit of $1.8 million, down from $2.2 million in 2013. Despite these relatively poor results, analysts and investors were pleasantly surprised, sending the stock price up. Since earnings were reported, the stock gained about 20%.

Disclosure: None