Ridgeback Capital’s Latest Healthcare Picks: Cara Therapeutics, Trillium Therapeutics and More

Incorporated in 2006, Ridgeback Capital was founded by Wayne Holman, with a major focus on the healthcare sector. Prior to this, Wayne Holman worked for Sigma Capital, a former subsidiary of Steve Cohen’s SAC Capital Advisors. According to the latest 13F and 13G filings, Ridgeback Capital holds equity positions in Cara Therapeutics Inc (NASDAQ:CARA), Trillium Therapeutics Inc. (NASDAQ:TRIL), and Applied Genetic Technologies Corp (NASDAQ:AGTC)

Insider Monkey follows the investment picks of billionaire investors and hedge funds, and our research has indicated that these hedge funds are extremely efficient at identifying small-cap investment opportunities. Our back tests ranging from 1999 through 2012 have indicated that 15 most popular small-cap stocks among hedge funds, has outperformed the S&P 500 Total Return Index by nearly a percentage point per month. Moreover, these picks posted returns of 132% in the last 2.5 years, beating the S&P 500 ETF (SPY)’s returns by approximately 80 percentage points (find out more details).

Let’s take a closer look at Cara Therapeutics Inc (NASDAQ:CARA), a clinical-stage biopharmaceutical company, in which Ridgeback Capital has started a new position with over 1.795 million shares, and holds 7.9% of the company’s outstanding stock. While the stock gained over 1.1% in the first quarter of 2015, it delivered solid returns of 22.3% in the last four weeks, amid better than expected results and analyst upgrades. For the fourth quarter of 2014, Cara’s total revenues declined to $914,000, as compared to $973,000 a year earlier. Cara Therapeutics Inc (NASDAQ:CARA) posted a net loss of $0.18 per share for the same period, while the analysts expected a net loss of $0.3. Management intends to start pivotal Phase 3 clinical trials for a drug used to treat acute pain later this year. Moreover, the company is starting a Phase 2 clinical trial for its tablet formulation of Oral CR845, used for treating severe and chronic pains, by the end of the year. By the second quarter of 2015, Cara Therapeutics Inc (NASDAQ:CARA) expects a positive top-line data, for its enduring Phase 2 trial with I.V. CR845 in uremic pruritus. James E. Flynn’s Deerfield Management is among the major shareholders in Cara Therapeutics, and increased the fund’s exposure to the stock by 24% during the fourth quarter of 2014, to 473,588 shares, valued at $4.7 million.