Kevin Kotler’s Broadfin Capital LLC, one of the leading healthcare-focused hedge funds, disclosed its ownership of nearly 1.48 million shares in Medgenics Inc. (NYSE:MDGN) in a recent Securities and Exchange Commission filing, which corresponds to 5.92% of the company’s outstanding common stock. Therefore, this transaction increases Broadfin Capital’s position in Medgenics by 450,200 shares since its most recent 13F filing and strengthens the fund’s position as the largest shareholder in the medical technology and therapeutics company.
Broadfin Capital LLC is a healthcare-focused hedge fund established by the seasoned investor in medical technology companies, Kevin Kotler, in 2005. The investment management firm employs a value-oriented investment strategy based on thorough proprietary fundamental research. Kevin Kotler is able to evaluate medical technologies and devices at all stages of development as he has been engaged in analyzing and investing in medical technology companies for more than 20 years. Kotler is also backed up by a very experienced team of professionals that has valuable research and investment experience in the medical technology, pharmaceutical, and biotechnology sectors. Broadfin Capital is primarily focusing on companies that develop products intended to improve healthcare outcomes and lower costs. It is also worth mentioning that Kotler’s hedge fund ranked as the third-best performing fund in our database in the second quarter, and as the top performing fund in 2015 through the end of June. However, our figures do not represent the actual returns of the fund, and are only an estimate of its stock picks’ performance. The fund’s most recent 13F filing reveals that Broadfin Capital manages a public equity portfolio with a market value of $1.28 billion, while its top ten holdings represent 51.02% of that portfolio.
At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read the details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 139% and beating the market by more than 80 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise (while avoiding their high fees at the same time) rather than large-cap stocks.
Medgenics Inc. (NYSE:MDGN) is the developer of a proprietary platform for the sustained production and delivery of therapeutic proteins and peptides in patients using ex vivo gene therapy and their own tissue for the treatment of rare and orphan diseases. Specifically, the company is developing the TARGT (Transduced Autologous Restorative Gene Therapy) system, and currently focusing on its lead product MDGN-201, which not so long ago was only in a Phase 1/2 clinical trial. Stirringly, Medgenics announced on July 15 that the first patient had been enrolled in the Phase 2 clinical trial for MDGN-201 (TARGTEPO), so the company is a step closer towards the commercialization of its lead candidate. For those with a medical background, this product is an investigational gene therapy for the treatment of anemia in end stage renal disease (ESRD) patients undergoing peritoneal dialysis. Having said that, the enrollment of the first patient in the Phase 2 clinical trial represents a noteworthy milestone for Medgenics. Even though the company cannot anticipate when its candidates will hit the market and when they will start generating profits, it seems that Medgenics is getting closer and closer to its moment of glory.