Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Three Biotech Stocks Are Down Today but Hedge Funds Say They Are Not Out

Page 1 of 2

Shares of ZIOPHARM Oncology Inc. (NASDAQ:ZIOP), Intrexon Corp (NYSE:XON), and Heron Therapeutics Inc (NASDAQ:HRTX) are down significantly today amid a broader market decline. Although the three have substantial hedge fund ownership between them, investors are still selling the biotech stocks off. Read on to see why.

Biotech Biochemical Stocks 3

In the eyes of most traders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are more than 8,000 funds in operation at present, Hedge fund experts at Insider Monkey look at the aristocrats of this group, around 700 funds. Contrary to popular belief Insider Monkey’s research revealed that hedge funds underperformed in recent years because of their short positions as well as the huge fees that they charge. Hedge funds managed to outperform the market on the long side of their portfolio. In fact, the 15 most popular small-cap stocks among hedge funds returned 118% since the end of August 2012 and beat the S&P 500 Index by 60 percentage points (see the details here).

ZIOPHARM Oncology Inc. (NASDAQ:ZIOP) and Intrexon Corp (NYSE:XON) are down because the biotech sector is down. The biotech sector is ‘risk off’ because Martin Shkreli, CEO of Turing Pharmaceuticals, raised the price of a drug called Daraprim 55x overnight and drew the ire of the news media and Hillary Clinton. Investors are concerned that Shkreli’s price hike could prompt regulators to curb biotech prices. Any ceiling in drug prices would negatively affect developing biotech companies’ prospects, many of whom are cash flow negative.

Follow Ziopharm Oncology Inc (NASDAQ:ZIOP)
Trade (NASDAQ:ZIOP) Now!

As it stands, hedge funds are still bullish on ZIOPHARM and Intrexon. According to our database of around 730 funds, the total number of investors long ZIOPHARM Oncology Inc. (NASDAQ:ZIOP) rose to 15 at the end of June from 13 at the end of March while the total value of hedge funds’ holdings increased to $95 million (6.2% of the float) from $87.56 million. Among the funds that established new positions in ZIOPHARM were Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, which bought 305,330 shares in the second quarter, and James Dinan’s York Capital management, which purchased 428,657 shares from March 31 to June 30. Marc Lisker, Glenn Fuhrman And John Phelan‘s MSDC Management increased its position by 2% to 4.48 million shares in the same time frame too.

Follow Intrexon Corp (NYSE:XON)
Trade (NYSE:XON) Now!

The total number of hedge funds long Intrexon Corp (NYSE:XON) rose to 21 in the second quarter from 20 in the first quarter, while the total value of hedge fund holdings increased to $387.43 million (7.3% of the float) on June 30 from $340.49 million on March 31. David Cohen And Harold Levy’s Iridian Asset Management increased its holdings by 25% to 2.26 million shares, while John Thiessen’s Vertex One Asset Management upped its stake by 100% to 100,000 shares. Dan Loeb‘s Third Point kept its holdings the same at 2.7 million shares.

Follow Heron Therapeutics Inc. (NASDAQ:HRTX)
Trade (NASDAQ:HRTX) Now!

Heron Therapeutics Inc (NASDAQ:HRTX) is down more than 26% after announcing the results of its recently finished Phase 3 MAGIC study of SUSTOL®(granisetron) Injection, extended release.

For the primary endpoint, the proportion of patients with delayed-phase complete response (CR) was significantly greater with the SUSTOL (64.7%) versus ondansetron regimen (56.6%), an absolute treatment difference of 8.0% (95% CI 1.7-14.4; p = 0.014), equating to a relative 14.2% CR rate improvement.

Although the data showed that SUSTOL was generally well tolerated with no new safety concerns, the data did not meet market expectation’s on efficacy. SUSTOL has a PDUFA goal date of January 17, 2016.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!