Redmile Group’s Top Q4 Moves as Its Long Positions Show Gains of 20% in 2015

Jeremy Green’s Redmile significantly increased its exposure to Clovis Oncology Inc. (NASDAQ:CLVS) during the December quarter, as the firm boosted its stake by 838,302 shares or 87% to 1.80 million shares. The freshly-increased stake was worth $62.86 million at the end of 2015 and accounted for 4.70% of the fund’s equity portfolio. The shares of the biopharmaceutical company that focuses on developing anti-cancer agents have plummeted 77% over the past 52 weeks, mainly following news in November that Clovis Oncology Inc. (NASDAQ:CLVS)’s potential FDA approval of its lung cancer product candidate, called rociletinib, might be delayed. The FDA was anticipated to communicate its decision regarding rociletinib by March 30, but the review was prolonged by a few months after the agency had asked for additional clinical data. Although a three-month delay does not seem to be a serious problem, investors worry that a potential delay in the FDA approval and in the possible commercial launch of rociletinib will enable competitors’ lung cancer treatments to establish a strong position in the market. The number of hedge funds from our database with stakes in Clovis dropped to 24 from 31 during the final quarter of last year. Zach Schreiber’s Point State Capital owns 3.50 million shares of Clovis Oncology Inc. (NASDAQ:CLVS) as of December 31.

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Redmile trimmed its holding in Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) by 199,420 shares or 17% in the December quarter to 938,139 shares, valued at $61.58 million. The global pharmaceutical company operates its business through two main segments: generic medicines, which include chemical and therapeutic equivalents of originator medicines in various dosage forms; and specialty medicines. On July 27, 2015, the Israel-based pharmaceutical company announced that it had agreed to acquire Allergan’s generics drug business Actavis Generics, which will enable Teva to become the largest maker of generic medicines in the world. Under the terms of the deal, Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) will pay $33.75 billion in cash and roughly 100 million Teva shares should the deal be approved. However, if the deal does not go through, Teva must pay Allergan $1 billion. Teva shares are up 1% over the past year, despite dropping by 12% since the beginning of 2016. Meanwhile, fresh statistics show that short interest in Teva is slowly fading away, with 14.77 million shares being shorted by investors as of February 12. The hedge fund sentiment towards the stock was positive in the fourth quarter, as the number of money managers with positions in the company climbed to 81 from 70 quarter-on-quarter. John Paulson’s Paulson & Co reported owing 20.41 million shares of Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) through its most recent 13F.

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