Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Peter Kolchinsky Is Betting Big On Achillion Pharmaceuticals, Inc. (ACHN), Wave Life Sciences (WVE) & More Heading Into 2016

Peter Kolchinsky founded RA Capital Management in 2001 and focuses mainly on healthcare stocks. One of the few hedge fund managers who actually holds a medical degree, Kolchinsky currently oversees an equity portfolio valued at roughly $1 billion, according to figures from the fund’s latest 13F filing. He also has a habit of investing in private biotech companies, which allows him to buy more shares at lower prices before the stock becomes available to the public. Insider Monkey calculates a fund manager’s stock picking ability by looking at the weighted average returns of his or her long positions in companies with a market cap that exceeds $1 billion, based on the size of those positions at the beginning of each quarter. Our calculations show that Kolchinsky’s stock picks have generated a positive return of 34.5% for 2015, while the equity portfolio of Martin Hughes‘ Toscafund Asset Management, which holds an equity portfolio with similar value, registered a loss of 3.1% for the year. In this article we’ll take a look at Peter Kolchinsky’s top five equity picks for the first quarter of 2016, which includes two new companies that went public during the 2015 fourth quarter.

An everyday investor doesn’t have the same resources and capabilities to analyze different publicly-traded companies as hedge funds do. At Insider Monkey, we follow the activity of several hundred of the best-performing hedge funds as part of our strategy and through extensive research, we have determined that the best approach to outperform the broader indices is to follow hedge funds into their top small-cap ideas (see more details here).

Peter Kolchinsky
Peter Kolchinsky
RA Capital Management

Aclaris Therapeutics Inc (NASDAQ:ACRS) is one of the biggest new positions in RA Capital Management’s equity portfolio at the end of December. According to the fund’s latest 13F filing, Peter Kolchinsky acquired 2.56 million shares valued at $69.1 million at the end of December. A developer of therapies for dermatological conditions, Aclaris Therapeutics Inc (NASDAQ:ACRS) went public in October 2015 at $11 per share. Although it was an instant hit, surging as high as $33.88 per share in December, the stock has soon embarked on a downtrend, which has continued into 2016. So far this year, Aclaris Therapeutics Inc (NASDAQ:ACRS) has lost approximately 30% of its value.

At the end of September, Axovant Sciences Ltd (NYSE:AXON) was Kolchinsky’s second largest equity position. Although he has made no changes to the stake during the fourth quarter and RA Capital Management continued to hold 5 million shares, Axovant Sciences Ltd (NYSE:AXON) slipped to fourth largest bet by value and it was worth approximately $90.1 million at the end of December. On February 9, the company reported a loss of $0.64 per share, which fell short of analysts’ expectations of a loss of $0.15 per share. With two drug candidates in the pipeline, Axovant Sciences Ltd (NYSE:AXON) still has $300 million in cash to burn through.

Kolchinsky also decided to increase his stake in Dyax Corp. (NASDAQ:DYAX), which was the subject of a takeover by Shire PLC (ADR) (NASDAQ:SHPG). RA Capital Management inched up its stake by 7% over the quarter to approximately 2.72 million shares valued at a little over $102 million. Since then, Shire has completed the acquisition of Dyax Corp. (NASDAQ:DYAX) for $37.30 per share, which would imply Kolchinsky’s investment is actually worth roughly $101 million. In addition, Shire agreed to pay an additional $4 for each Dyax Corp. (NASDAQ:DYAX) share, should the company’s drug candidate DX-2930 receive approval from the U.S. Food and Drugs Administration.

Follow Dyax Corp (NASDAQ:DYAX)
Trade (NASDAQ:DYAX) Now!

Turn the page to find out about Kolchinsky largest new bet and his top equity position at the end of 2015.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.