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Most Popular Healthcare Penny Stocks Among Hedge Funds

Catalyst Pharmaceuticals Inc (NASDAQ:CPRX)

Same as its peers on the previous page, Catalyst Pharmaceuticals Inc (NASDAQ:CPRX) counted nine hedge funds in our database as supporters as of the end of the first quarter, with their combined stakes accounting for more than 20% of the float. Notable was the stake owned by Kevin Kotler’s Broadfin Capital, which took advantage of a heavily depressed stock price early in 2016 to almost double its stake to 8.2 million shares as of March 31. Once again, Baker Bros. Advisors was also among the largest investors of record, with almost 5.5 million shares.

Catalyst Pharmaceuticals Inc (NASDAQ:CPRX) has widely underperformed the market, tumbling by almost 73% since the year started, and by about 43.3% in the second quarter alone, dragging its shares down to $0.67. A few weeks ago, the company announced it was firing 30% of its workforce, effective immediately, in order to preserve its cash resources after the FDA said the firm needed a new Phase 3 study to support its Firdapse (amifampridine) NDA.

Epirus Biopharmaceuticals Inc (NASDAQ:EPRS)

Guess how many hedge funds in our database were long Epirus Biopharmaceuticals Inc (NASDAQ:EPRS) on March 31…Yes, the answer is nine! And, yet again, their combined stakes accounted for roughly 20% of the company’s outstanding shares. Broadfin Capital and Adage Capital were among the top hedge fund investors in the stock, with 1.07 million shares and 772,007 shares, respectively. However, Camber Capital Management’s position was larger; Stephen Dubois’s fund declared holding 1.84 million shares of the company worth almost $5 million as of the end of March.

Epirus Biopharmaceuticals Inc (NASDAQ:EPRS) is down by more than 77% year-to-date, with most of the losses coming in the second quarter, mostly driven by news of a reprioritization of the company’s pipeline, the replacement of its CEO, and a reduction of up to 40% of its workforce. Shares currently trade at just $0.68.

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Orexigen Therapeutics, Inc. (NASDAQ:OREX)

Finally, there’s Orexigen Therapeutics, Inc. (NASDAQ:OREX), which also counted nine hedge fund supporters in our database. Their combined stakes accounted for roughly 23.6% of the company’s shares, with Seth Klarman’s Baupost Group alone holding more than 15% of the float. Its stake comprised 22.26 million shares, up from just 2.26 million shares at the end of 2015.

Orexigen Therapeutics, Inc. (NASDAQ:OREX) has also had a tough 2016, having lost more than 62% year-to-date, pulling its shares down to $0.53. However, the losses were largely realized in the first quarter. They spiked yesterday by 51.56% after the issuance of a favorable Markman ruling against Actavis (now Allergan plc Ordinary Shares (NYSE:AGN)) concerning Orexigen’s patents for Contrave. Actavis was trying to market a generic version of the drug with the same dosage.

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Disclosure: Javier Hasse holds no positions in any of the securities mentioned in this article.

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