David Cohen and Harold Levy of Iridian Asset Management have significantly increased their stake in Halozyme Therapeutics, Inc. (NASDAQ:HALO) according to a recent 13G form filed with the SEC. The $11.87 billion special situation investor has increased its stake in the $2.55 billion bio-pharmaceutical company to 13.10 million shares, up from 8.21 million shares that it reported previously. The new stake amasses 10.3% of Halozyme Therapeutics, Inc’s outstanding shares.
Iridian Asset Management LLC has been positive on the healthcare sector of late, and with good reason. The fund held Valeant Pharmaceuticals Intl Inc (NYSE:VRX) as one of its top picks as per the fund’s latest 13F filing. The fund’s exposure to the health care sector was at 16% at the end of the first quarter of 2015 compared to 14% at the end of 2014
Halozyme Therapeutics, Inc. (NASDAQ:HALO) recently entered into a global collaboration and license agreement with AbbVie Inc (NYSE:ABBV). As part of the agreement, the company will develop and commercialize products using its ENHANZE™ platform along with proprietary compounds from AbbVie. Halozyme will receive a total payment of $130 million for nine collaboration targets. However, the company will receive a $23 million payment immediately. The payments will be subject to specified terms and milestone targets set by AbbVie.
Last month Halozyme provided interim data of its new drug PEGPH20, which is used for treatment of patients with metastatic pancreatic cancer. The data which was presented was encouraging, with free survival months jumping to 9.2 months compared to 4.3 months previously. Overall response rate also jumped to 52% compared to 24%.
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Among the over 700 active hedge funds that we track, the interest in Halozyme has remained relatively neutral over the course of the first quarter, as 17 funds had invested $377.38 million in the company at the end of March compared to 18 funds with $234.98 million invested at the end of 2014. Israel Englander’s Millennium Management, and First Eagle Investment Management are the two of the largest stockholders of Halozyme Therapeutics, Inc. (NASDAQ:HALO) within our database, with holdings of 4.75 million and 3.83 million shares respectively.
The most recent insider activity was seen in September 2014 when President and CEO Helen Torley, along with VP and CFO A. Ramsay each bought shares. The CEO bought 50,000 shares at an average price of $8.92 whereas the CFO bought 25,000 shares at an average price of $8.90. Shares of Halozyme Therapeutics have gone up by more than 100% since these transactions took place. We track hedge fund and insider transactions because imitating these transactions historically outperformed the market by a significant margin. The 15 most popular small-cap stocks among hedge funds outperformed the market by an average of 95 basis points per month in our back tests. We have been tracking the performance of these stocks in real time since the end of August 2012. These stocks returned 141% since then, vs. less than a 58% gain for the S&P 500 Index (see the details here).
We don’t think it is too late to imitate insiders and hedge funds into Halozyme, and neither does Iridian; it kept buying the stock as the stock delivered a 40% gain since the end of the first quarter.