A Schedule 13G is a public filing that must be submitted with the SEC by every hedge fund manager or other investor who acquires ownership of more than 5% in a publicly-traded company. An ownership stake of over 5% is relatively significant, which is the reason why the SEC requires investors to report these ownership positions to the public. Most of the stocks revealed in 13G filings represent high-conviction ideas of hedge fund firms and other institutional investors, so these filings may reveal numerous potential winners. Having said that, this article will discuss three recent healthcare-related 13G filings submitted by several hedge fund investors tracked by Insider Monkey.
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In a Schedule 13G filing, Glenn Russell Dubin’s Highbridge Capital Management reported owning 6.05 million shares of Synergy Pharmaceuticals Inc. (NASDAQ:SGYP), of which 5.70 million shares are issuable upon the conversion of convertible notes and 9,400 shares are issuable upon the exercise of warrants. The freshly-disclosed stake accounts for 5.1% of the company’s outstanding stock. Highbridge Capital owned a mere 338,014 shares of the company at the end of the third quarter.
The biopharmaceutical company is currently preparing its first new drug application (NDA) for plecanatide in the chronic idiopathic constipation (CIC) indication and plans to file with the U.S. Food and Drug Administration (FDA) in January 2016. This leading product candidate is also being studied in two ongoing phase III clinical trials for irritable bowel syndrome with constipation (IBS-C). Synergy Pharmaceuticals Inc. (NASDAQ:SGYP) intends to file its second NDA with plecanatide in the IBS-C indication by the end of 2016. This drug has great potential if considering that anti-constipation drug Linzess, marketed by Allergan PLC (NYSE:AGN), is among the fastest-growing drugs in the nation. The biopharmaceutical company has seen its shares advance by 105% since the beginning of the year.
The smart money sentiment towards the stock did not change during the third quarter, as the number of investors with positions in the company remained unchanged at 31 during the three-month period. These hedge fund investors held 22.60% of the biopharmaceutical company’s stock, though the value of their investments declined to $134.64 million from $180.43 million quarter-over-quarter. Billionaire John Paulson of Paulson & Co. holds a 9.0 million-share position in Synergy Pharmaceuticals Inc. (NASDAQ:SGYP) as of September 30.
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Let’s now move on to the next page of this article, where we reveal Deerfield Management’s position in a struggling biopharmaceutical company and Visium Asset Management’s upped stake in a medical technology company.
According to a separate 13G filing, James E. Flynn’s Deerfield Management and its affiliates own 1.30 million shares of Zafgen Inc. (NASDAQ:ZFGN), representing 4.78% of the company’s outstanding shares. The filing was issued to report that Deerfield Management ceased to be the beneficial owner of more than 5% of Zafgen’s outstanding common stock. James Flynn’s Deerfield reported owning a 553,472-share position in the company through its 13F filing for the September quarter.
The shares of the biopharmaceutical company that aims to improve the health of patients affected by obesity and complex metabolic disorders plummeted in early-October following the announcement that a patient had died while being involved in the ongoing Phase 3 clinical trial of beloranib, leading the FDA to put the Investigational NDA for beloranib on partial clinical hold. Zafgen Inc. (NASDAQ:ZFGN)’s lead product candidate, beloranib, is a novel, first-in-class subcutaneous injection developed for the treatment of severe obesity. While the company’s stock is down by 45% this year, the shock from the October news is slowly fading away (it is not known whether the patient’s death was related to the treatment with beloranib), as the stock has embarked on a slow uptrend since mid-October.
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The number of hedge fund investors with positions in the company climbed to 14 from 12 during the third quarter, while the overall value of these positions declined to $82.28 million from $100.75 million quarter-over-quarter. At the same time, these investors had stockpiled nearly 10% of the company’s shares as of September 30. Jason Karp’s Tourbillon Capital Partners added a 458,758-share position in Zafgen Inc. (NASDAQ:ZFGN) to its portfolio during the third quarter.
The final 13G filing we’ll discuss disclosed that Jacob Gottlieb’s Visium Asset Management currently holds 2.17 million shares of Zeltiq Aesthetics Inc. (NASDAQ:ZLTQ), accounting for 5.6% of its outstanding common stock. This denotes an increase of 914,419 shares from the position that Visium disclosed via the latest round of 13Fs. The medical technology company primarily generates revenue from its first commercial product, the CoolSculpting system, which is designed to selectively reduce stubborn fat bulges. The company generated $61.2 million in revenue in the third quarter, compared to $45.7 million for the third quarter of last year. 48% of the aforementioned figure was attributable to the company’s CoolSculpting system, while the remaining revenue was generated by its consumable procedure packs. Meanwhile, Zeltiq Aesthetics Inc. (NASDAQ:ZLTQ) reported net income of only $1.5 million for the year that ended December 31, 2014 and reported a bottom-line of $1.2 million for the nine-month period that ended September 30, 2015. The shares of the medical technology company have gained almost 9% this year. It is also worth pointing out that the aesthetics industry in which the company operates is highly interconnected with the broader economic conditions, as the decision to undertake a procedure is primarily propelled by consumer demand.
The number of smart money investors with positions in the company at the end of the third quarter stood at 25, compared to 26 reported following the previous one. These 25 investors owned slightly more than 27% of the company’s shares. Steve Cohen’s Point72 Asset Management owns a 1.44 million-share position in Zeltiq Aesthetics Inc. (NASDAQ:ZLTQ) as of the end of the third quarter.
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Disclosure: None
