Venrock Healthcare Capital Partners is a fund that is focused entirely on the healthcare sector, mainly on the biotech sector. In the latest round of 13F filings, VHCP reported an equity portfolio worth $222.51 million held at the end of the third quarter, up from $187.11 million in the previous quarter. The fund has made some changes to its top picks and in this article we are going to take a look at the three largest holdings in terms of value, which are represented by Avalanche Biotechnologies Inc (NASDAQ:AAVL), Anacor Pharmaceuticals Inc (NASDAQ:ANAC), and DBV Technologies, Boulogne-Billancourt (NASDAQ:DBVT).
VHCP is managed by Venrock, a firm with a history of almost 80 years. The funds held by Venrock invested in a bunch of early-stage companies that over the years have climbed and are currently some of the greatest companies on the market. Among these investments are technology names like Apple, Intel, and healthcare companies such as Illumina, Inc. (NASDAQ:ILMN) and Gilead Sciences, Inc. (NASDAQ:GILD).
In this way, since Venrock has made many successful bets over the years, we consider that it is important to see which biotech stocks VHCP is bullish on. During the third quarter, the fund added Avalanche Biotechnologies Inc (NASDAQ:AAVL) to its equity portfolio and the $42.83 million stake is the largest in terms of value as of the end of September. The investor holds 1.38 million shares of Avalanche Biotechnologies Inc (NASDAQ:AAVL), the position representing more than 19% of its total equity portfolio value.
Avalanche Biotechnologies Inc (NASDAQ:AAVL) is an $890 million biotechnology company that is engaged in discovering and developing gene therapies for patients with sight-threatening ophtalming diseases. The stock began trading at the beginning of August and it grew by more than 43% since the IPO. The company is also backed by another healthcare-focused fund, James Flynn‘s Deerfield Management, which owns 2.05 million shares as of the end of September.
Anacor Pharmaceuticals Inc (NASDAQ:ANAC) is on the second place and is also a biotech stock. VHCP reported ownership of 1.18 million shares, down by 367,500 shares over the quarter; the position is valued at $28.83 million and represents 13% of the total equity portfolio. While VHCP has been holding shares for several years, the stock of Anacor Pharmaceuticals Inc (NASDAQ:ANAC) appreciated by 108% year-to-date.
Anacor Pharmaceuticals Inc (NASDAQ:ANAC) is engaged in development and commercialization of small-molecule therapeutics that are derived from its boron chemistry platform. Among other investors, Steven Cohen‘s Point72 Asset Management initiated a position in Anacor during the third quarter and owns 1.55 million shares as of the end of September. Julian and Felix Bakers‘ Baker Bros Advisors and William Leland Edward‘s Palo Alto Investors raised their stakes by 956,700 shares and 455,100 shares respectively during the same period to 4.20 million shares and 2.12 million shares respectively.
The third stock that we would like to mention is DBV Technologies, Boulogne-Billancourt (NASDAQ:DBVT). VHCP , in its latest 13F filing, has reported holding shares of DBV TECHNOLOGIES (OTCMKTS:DBVTF), but the company conducted a global offering and listed on several markets, including NASDAQ, under a new ticker. Since DBV Technologies, Boulogne-Billancourt (NASDAQ:DBVT) started trading on NASDAQ at the end of October, its stock went up by more than 11%. VHCP reported ownership of 565,000 shares of the company in its latest 13F filing, up by 85,000 shares over the quarter, the aggregate value of the stake amounting to $26.33 million, equal to 11.8% of the total portfolio value.
So, overall, VHCP ‘s top three holdings amass 44% of its total equity portfolio, and all three stocks have provided excellent returns for the investor. This shows that following VHCP into biotech stocks can be a good way for smaller investors to find interesting investment opportunities in the industry, especially taking into account that the fund invests in many small-cap stocks, which are often cheaper and can provide better returns.