Billionaire David Shaw’s D.E. Shaw reported a position of 4.8 million shares in InterMune at the end of September (find D.E. Shaw’s favorite stocks). QVT Financial, managed by Daniel Gold, was another major holder of the stock in our database of 13F filings with 5.6 million shares in its portfolio (see QVT’s stock picks). QVT also had significant holdings of Repros. The largest position out of the funds and other notable investors in our database belonged to Joseph Edelman’s Perceptive Advisors; Repros was the second largest 13F position Perceptive owned by market value (check out more stocks Perceptive owns).
Of course, investing in a development stage biotechnology company, even a publicly traded one, is almost the height of speculation particularly if an investor has little experience in healthcare or little understanding of the prospects of the companies’ products. Even the fact that a healthcare focused fund is buying a stock should not be treated as too validating an endorsement. We’d also note that each of these companies Baker Brothers has been buying has a sizable bearish community, as demonstrated by the short interest, and so it’s likely that at least some in that group have a healthcare background as well. If anything the increases in these stakes should be treated as a note or as a suggestion that investors who do feel comfortable evaluating development stage biotechnology companies should put a moderate amount of research into InterMune and Repros.
Disclosure: I own no shares of any stocks mentioned in this article.