Adage Capital Management, founded by Phill Gross and Robert Atchinson, recently disclosed an ownership stake of 2.66 million shares in Five Prime Therapeutics Inc. (NASDAQ:FPRX) in a 13G filing with the SEC, which represents 10.33% of the company’s outstanding shares. This represents an increase of 701,457 shares from the fund’s previous stake, as revealed in its latest 13F filing for the period of June 30.
Adage Capital Management LP is a Boston-based hedge fund co-founded by two former money managers at Harvard University’s endowment, Phill Gross (pictured above) and Robert Atchinson. The investment management firm was launched with a $3.8 billion commitment from Harvard Management Company back in 2001. Interestingly, its founders continue to run this firm in the same style they managed the aforementioned equity group at Harvard. They take long and short bets on individual stocks within different industries by employing fundamental analysis with a focus on intra-industry valuation methodologies. The 13F filing for the June quarter reveals that Adage Capital Management oversees a public equity portfolio worth $40.10 billion.
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Five Prime Therapeutics Inc. (NASDAQ:FPRX) is a clinical-stage biotechnology company that engages in the discovery and development of protein therapeutics that block cancer and inflammatory disease processes. The company’s product candidates include FPA008, an antibody that inhibits the colony-stimulating factor-1 receptor, developed for the treatment of rheumatoid arthritis; FPA144, an antibody that inhibits fibroblast growth factor receptor 2b, developed for the treatment of gastric cancer; and FP-1039/GSK3052230, a fusion protein that traps and neutralizes cancer-promoting fibroblast growth factors. The shares of the biotechnology company have lost 27% since the beginning of the year, partly owing to the seemingly “disappointing” second quarter financial results and business update it revealed at the beginning of August. However, the stock gained 8.24% on Wednesday, which might indicate a turnaround point for Five Prime Therapeutics. Jeffrey Jay and David Kroin’s Great Point Partners initiated a new position in the company comprised of 678,595 shares during the second quarter, whereas Steven Cohen’s Point72 Asset Management reduced its stake by 54% to 479,411 shares.
Just recently, the biotechnology company announced that the initial data from an ongoing Phase 1b trial of FP-1039/GSK3052230 on patients with squamous non-small cell lung cancer and mesothelioma will be released during an oral presentation at the upcoming World Conference on Lung Cancer 2015 in Denver from September 6-9. It’s worth noting that Five Prime Therapeutics has a license and collaboration agreement with GlaxoSmithKline plc (NYSE:GSK), the company that is actually conducting the aforementioned clinical trial. Nevertheless, should the trial evaluating the safety and efficacy of the product candidate deliver positive data, the shares of both companies will most likely enjoy gains, so it’s worth keeping a close eye on the upcoming presentation. Even though it makes little sense to discuss and anticipate the extent to which the company can benefit from the commercialization of this product, potential positive data on the trial will definitely mark an important step towards bringing the product to the market.
We can now take a quick look at some financial figures that might provide some useful insights into the company’s activities and operations. Five Prime’s cash, cash equivalents, and marketable securities added up to $207.4 million on June 30, compared to $149.1 million registered on December 31, 2014. This figure increased as a result of the public offering of common stock that took place at the beginning of the year. The company expects to use between $65 and $70 million of its net cash for operating activities in 2015 and anticipates ending the year with $158 – $163 million in cash, which will be enough to fund its operations through 2017. Five Prime Therapeutics’ research and development expenses for the second quarter increased by 12% year-over-year to $13.3 million, which indicates that the company is hiking the development output of its product candidates. The company’s net loss came to $11.5 million, compared to $9.9 million reported a year ago.
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