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A Look At Three Activist Moves By Several Elite Hedge Funds

According to the Schulte, Roth & Zabel’s Activist Investing 2015 Annual Review, 344 companies were targeted by activist investors in 2014, as compared with 291 recorded a year earlier. Shareholder activism has been surging in recent years and will most likely intensify in the upcoming years, considering the consistent performance of activist investors and their small ownership in U.S. equities. More capital has been flowing into activist funds over the past several years, so U.S. equity markets will most likely witness an extension of the shareholder activism arena over the next years. Having this in mind, this article focuses on three 13D (activist) filings submitted with the SEC by several widely-known hedge funds monitored by Insider Monkey.

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According to a Schedule 13D filing, Baker Bros. Advisors, managed by Julian and Felix Baker, owns 4.87 million shares in Bellicum Pharmaceuticals Inc. (NASDAQ:BLCM), which account for 18.4% of the company’s outstanding common stock. This compares with the 4.19 million-share position disclosed in the fund’s latest 13F filing. This clinical stage biopharmaceutical company that focuses on discovering and developing novel cellular immunotherapies for different types of cancer has seen its shares decline by 12% this year. The company utilizes its proprietary Chemical Induction of Dimerization (CID) technology platform to engineer and control certain components of the immune system in real time. Nonetheless, Bellicum Pharmaceuticals Inc. (NASDAQ:BLCM) has not generated any product revenue just yet, but has recorded revenue from government grants. The company’s leading product candidate, BPX-500, is developed as an adjunct T-cell therapy that is administered after allogeneic hematopoietic stem cell transplant (HSCT) with the aim of improving transplant outcomes by speeding up the recovery of the immune system after an HSCT procedure. However, it is still a long road until this product candidate reaches the market, considering that BPX-501 is currently studied in several Phase ½ clinical trials in the U.S. and Europe. A total of 15 hedge funds from our database were invested in the biopharmaceutical company at the end of the third quarter, which amassed 30.40% of its outstanding shares. Israel Englander’s Millennium Management owns nearly 993,000 shares in Bellicum Pharmaceuticals Inc. (NASDAQ:BLCM) as of September 30.

Julian Baker And Felix Baker
Julian Baker And Felix Baker
Baker Bros. Advisors

Let’s move on to the next page of this article, where we discuss the 13Ds submitted by Leon Cooperman and Orbimed Advisors.

As stated in a separate 13D filing, billionaire Leon Cooperman of Omega Advisors holds a 2.68 million-share position in Resource America Inc. (NASDAQ:REXI), which accounts for 12.7% of the company’s shares. Omega Advisors owned only 779,187 shares in the company on September 30, as revealed by the fund’s 13F filing for the third quarter. The 13D public filing also disclosed that Leon Cooperman and his team have engaged discussions with the company’s management and Board of Directors and may continue doing so in the future. Possible discussions may be related to Resource America Inc. (NASDAQ:REXI)’s business, management, operations, assets, capitalization, financial condition, among other things. The shares of this asset management company that specializes in real estate and credit investments are down by 48% year-to-date. The company services and manages investment opportunities through its real estate, financial fund management and commercial finance subsidiaries, holding $21.7 billion in assets under management as of September 30. The company’s revenues from its real estate operations totaled $54.3 million for the nine-month period that ended September 30, up $13.3 million year-on-year. A mere six smart money investors tracked by Insider Monkey had stakes in the company at the end of the third quarter, accumulating 7.10% of its outstanding common stock. Although the number of funds invested in the company remained flat quarter-on-quarter, the value of hedge funds’ investments shrank to $10.59 million from $14.30 million. Richard Mashaal’s Rima Senvest Management cut its stake in Resource America Inc. (NASDAQ:REXI) by 12% during the July-to-September quarter to roughly 475,000 shares.

Leon Cooperman
Leon Cooperman
Omega Advisors

In a freshly-amended 13D filing, Samuel Isaly’s Orbimed Advisors reported selling exactly 500,000 shares in Relypsa Inc. (NASDAQ:RLYP) last week at prices that ranged from $25.88 to $28.75 per share. The filing discloses that Orbimed Advisors holds an ownership stake of 7.40 million shares in the biopharmaceutical company, representing 17.75% of the company’s outstanding common stock. The shares of Relypsa have gained nearly 66% over the past three-month period, thanks to the U.S. FDA approval of its Veltassa (patiromer) for the treatment of hyperkalemia. The stock is almost 6% in the red year-to-date, but several financial hubs and numerous analysts have great expectations about the company’s future. Although the existing options for the chronic management of hyperkalemia are limited, the company is aware of the threatening competition in the industry. For instance, ZS Pharma Inc. (NASDAQ:ZSPH), which is developing a zirconium silicate particle to treat hyperkalemia referred to as ZS-9, submitted a New Drug Application for ZS-9 this spring and anticipates a decision by the end of May, 2016. At the end of December, Relypsa Inc. (NASDAQ: RLYP) announced that Veltassa was made available for prescription to patients with hyperkalemia in the U.S., so it remains to see to what extent the company is able to capitalize on the first FDA-approved medicine for hyperkalemia in more than 50 years. A total of 25 hedge funds from our extensive database had positions in the company on September 30, stockpiling 40.40% of its outstanding shares. James E. Flynn’s Deerfield Management holds a 1.10 million-share stake in Relypsa Inc. (NASDAQ:RLYP) as of the end of the third quarter.

Samuel Isaly
Samuel Isaly
OrbiMed Advisors

Disclosure: None

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