Bronte Capital, an investment management company, released its “Amalthea Fund” fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. The fund lost -2.12% in December, -0.97% for the quarter, and gained 15.60% for the calendar year. Compared to that, the MSCI ACWI index had gains of 1.28%, 4.63%, and 21.92% (in $A) during those periods, thanks to its global diversity. This quarter, and particularly in December, the market has been actively hostile to the fund’s strategy due to a generalized squeeze in high-short-interest names. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Amalthea Fund featured stocks like Karuna Therapeutics, Inc. (NASDAQ:KRTX) in the fourth quarter 2023 investor letter. Headquartered in Boston, Massachusetts, Karuna Therapeutics, Inc. (NASDAQ:KRTX) is a clinical-stage biopharmaceutical company. On March 1, 2024, Karuna Therapeutics, Inc. (NASDAQ:KRTX) stock closed at $316.24 per share. One-month return of Karuna Therapeutics, Inc. (NASDAQ:KRTX) was -0.26%, and its shares gained 59.77% of their value over the last 52 weeks. Karuna Therapeutics, Inc. (NASDAQ:KRTX) has a market capitalization of $12.057 billion.
Amalthea Fund stated the following regarding Karuna Therapeutics, Inc. (NASDAQ:KRTX) in its fourth quarter 2023 investor letter:
“December gave us a natural test of our shorting process. We have been short Karuna Therapeutics, Inc. (NASDAQ:KRTX) for most of 2023. Karuna are developing a drug (which they have coined “KarXT”) for the treatment of schizophrenia. KarXT is a combination of a molecule abandoned by Eli Lilly because of severe side-effects (xanomeline) and a generic used to treat urinary incontinence (trospium).
The bull case – simply stated – is that drugs which are effective in mental illnesses such as schizophrenia are hard to find. Moreover, they can’t be tested/explored in animals as there is no realistic mouse-model of schizophrenia.
The Lilly drug (xanomeline) was thought to work but with intolerable side-effects. What Karuna sought was a drug that did not cross the blood-brain barrier and would neutralize the effect of xanomeline in the body but not in the brain. They chose trospium…” (Click here to read the full text)
A research team in a laboratory, researching potential treatments for dementia-related psychosis.
Karuna Therapeutics, Inc. (NASDAQ:KRTX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, Karuna Therapeutics, Inc. (NASDAQ:KRTX) was held by 55 hedge fund portfolios, up from 41 in the previous quarter, according to our database.
We discussed Karuna Therapeutics, Inc. (NASDAQ:KRTX) in another article and shared Patient Capital Management’s views on the company. In addition, please check out our hedge fund investor letters Q4 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
