Below we present the list of 5 Struggling IPOs To Buy For The Long-Term. For our methodology and a more comprehensive list please see 10 Struggling IPOs To Buy For The Long-Term.
5. Third Harmonic Bio, Inc. (NASDAQ:THRD)
Number of Hedge Fund Shareholders: 9
IPO Price: $17.00
Current Price (as of June 9): $5.08
Third Harmonic Bio, Inc. (NASDAQ:THRD) shares plunged from $19 to less than $5 in mid-December after the clinical-stage biotech discontinued its trial for THB001 in patients with chronic inducible urticarial after two of the trial patients contracted asymptomatic liver transaminitis.
Jefferies responded by dropping Third Harmonic Bio, Inc. (NASDAQ:THRD) to ‘Hold’ from ‘Buy’ and slashing its price target on the stock to $3.60 from $30, while LifeSci Capital also dropped its rating on the stock to ‘Market Perform’ from ‘Outperform’ and removed its price target.
Side effects aside, Third Harmonic Bio, Inc. (NASDAQ:THRD) is nonetheless bullish on the efficacy data from the trial and believes its future KIT inhibitor candidates will build on the last trial’s results. The company also has enough cash at present to last in until early next year. OrbiMed Advisors, which is founded by Samuel Isaly, owns nearly 5.78 million shares of THRD.
T3. Hesai Group (NASDAQ:HSAI)
Number of Hedge Fund Shareholders: 13
IPO Price: $19.00
Current Price (as of June 9): $9.07
Chinese sensor maker Hesai Group (NASDAQ:HSAI) is beginning to reap the rewards of greater autonomous car production in China, as the company delivered record results for the quarter ended March 31. Revenue surged by 73% to $61 million as the company shipped over 28,000 ADAS lidar sensors during the quarter, compared to just 222 a year earlier.
That appears to be just the tip of the iceberg for Hesai Group (NASDAQ:HSAI), which projects to grow its lidar sensor shipments by another 40% quarter-over-quarter in Q2. It’s projected that more than 1 million semi-autonomous smart cars will be delivered in China over each of the next three years, so there’s an incredible near-term (and certainly longer-term) runway ahead of Hesai.
Chris Rokos’ Rokos Capital Management and Israel Englander’s Millennium Management each added more than 170,000 shares of Hesai Group (NASDAQ:HSAI) to their 13F portfolios in Q1.
T3. Prime Medicine, Inc. (NASDAQ:PRME)
Number of Hedge Fund Shareholders: 13
IPO Price: $17.00
Current Price (as of June 9): $15.01
Gene-editing biotech Prime Medicine, Inc. (NASDAQ:PRME) has been attracting some big names in the hedge fund industry, including Cathie Wood’s ARK Investment, which owned 1.92 million shares on March 31 and has continued buying shares of PRME in the second quarter.
Prime Medicine, Inc. (NASDAQ:PRME) has ambitious goals to say the least, as the company aims to build gene-editing technology that it believes could allow it to wipe out up to 90% of the disease-causing mutations currently known. The company has a long road ahead of it, but is already well set-up financially, with enough cash to fund its operations for another two years.
Stifel analyst Dae Gon Ha believes Prime Medicine, Inc. (NASDAQ:PRME) has improved upon prior gene-editing technology, but notes that there are few near-term catalysts to drive the stock higher. He nonetheless has a ‘Buy’ rating and $18 price target on it.
2. Corebridge Financial, Inc. (NYSE:CRBG)
Number of Hedge Fund Shareholders: 22
IPO Price: $21.00
Current Price (as of June 9): $16.89
Stuart J. Zimmer’s Zimmer Partners owns the largest of the 22 long positions in Corebridge Financial, Inc. (NYSE:CRBG) held on March 31 by the select group of hedge funds tracked by Insider Monkey’s hedge fund database. Several other funds own more than 2 million shares of CRBG, including Harris Associates, Ken Griffin’s Citadel Investment, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Corebridge Financial, Inc. (NYSE:CRBG), which was spun off from American International Group, Inc. (NYSE:AIG) last year, has over $365 billion in assets related to the retirement and insurance fields. AIG remains the firm’s largest shareholder and is beginning to unwind some of that overhang, recently pricing a secondary offering of 65 million shares at $16.25 per share.
Biased though it surely is, AIG also has a $68 price target on the stock. Bank of America on the other hand also has a ‘Buy’ rating on CRBG shares, but with a $26 price target.
The Oakmark Equity and Income Fund discussed some of the positives it sees in Corebridge Financial, Inc. (NYSE:CRBG) in the fund’s Q1 2023 investor letter:
“We added two new positions, Corebridge Financial, Inc. (NYSE:CRBG) and Wendy’s, in the quarter. Corebridge is a life and retirement company that was partially spun off from American International Group (AIG) through an initial public offering last fall. Corebridge has extensive, long-standing relationships with many of the largest financial institutions to sell various retirement products. It is also one of the largest retirement service providers to the education market through VALIC Financial Advisors. It also operates a high performing, seasoned life insurance business. The market is valuing the company like it is just a variable annuity provider despite its much more diversified and stable earnings stream. Part of the discount is due to the lack of liquidity and an overhang from AIG’s 77% ownership, which will eventually be brought to market. Trading at five times our estimate of normalized distributable cash flow, the stock is highly attractive to us, and we are willing to wait for the ownership overhang to resolve itself.”
1. Mineralys Therapeutics, Inc. (NASDAQ:MLYS)
Number of Hedge Fund Shareholders: 24
IPO Price: $16.00
Current Price (as of June 9): $15.34
Topping the list of struggling IPOs to buy for the long-term is Mineralys Therapeutics, Inc. (NASDAQ:MLYS), which counted 24 of the hedge funds tracked by Insider Monkey’s database as shareholders as of March 31. The top shareholder of the company is Srini Akkaraju and Michael Dybbs’ Samsara BioCapital, while Peter Kolchinsky’s RA Capital Management also holds a large MLYS position.
Mineralys Therapeutics, Inc. (NASDAQ:MLYS) is a clinical-stage biopharmaceutical company focused on developing treatments that target elevated levels of aldosterone, which typically result in high blood pressure and low potassium levels. The company recently dosed its first patient in a trial for lorundrostat in patients with uncontrolled or resistant hypertension.
Several firms have ‘Buy’ ratings and bullish price targets on Mineralys Therapeutics, Inc. (NASDAQ:MLYS) given their optimism about the potential for the company’s treatments. Bank of America has a $39 price target on the stock and predicts $2.4 billion in sales of lorundrostat by 2035, while Guggenheim has a $32 price target and sees “multibillion dollar” potential for aldosterone synthase inhibitors like lorundrostat.
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