As U.S equities have plummeted on global-growth worries, confident hedge funds and other investors have started piling up more shares of companies that are trading on the cheap. The following article will cover the moves made in a pair of healthcare stocks by two such reputable hedge funds. A recent 13D filing with the SEC disclosed that Samuel Isaly’s OrbiMed Advisors acquired a new stake of 307,179 shares (each common share represents 10 American Depository Shares) in Nabriva Therapeutics AG – ADR (NASDAQ:NBRV), accounting for 14.52% of its outstanding common stock. At the same time, Larry Robbins’ Glenview Capital Management reported buying 500,000 shares of Tenet Healthcare Corp. (NYSE:THC) at a weighted average price of $36.30. After the recent transaction, the investment firm owns 16.49 million shares or 16.56% of the company’s outstanding shares.
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Let’s provide a brief introduction to one of the investment firms mentioned above. OrbiMed’s investment business was launched in 1989 with its first public equity fund, and later expanded to include long/short equity and private equity investments in 1993. The firm’s flagship public equity strategy is a long/short hedge fund firm that focuses on the global healthcare sector. The hedge fund takes on a global event-driven approach to investing and aims to identify mispriced securities. As stated by the latest round of 13F filings with the SEC, OrbiMed Advisors manages a public equity portfolio with a market value of $11.96 billion as of June 30.
We can now switch our focus to Nabriva Therapeutics AG – ADR (NASDAQ:NBRV), a clinical stage biopharmaceutical company that engages in the research and development of novel anti-infective agents for the treatment of serious infections by focusing on the pleuromutilin class of antibiotics. The company recently concluded its initial public offering of 9 million ADSs (i.e. 900,000 common shares) at an IPO price of $10.25 per ADS. Nabriva Therapeutics is currently working on the development of its lead product candidate, lefamulin, which may become the first pleuromutilin antibiotic available for systematic administration in humans. Thus, the company believes that pleuromutilin antibiotics can tackle one of the greatest threats to human health caused by bacterial resistance. However, the success of Nabriva primarily depends on its lead product candidate, while its ability to deliver revenues strictly depends on the marketing approval for lefamulin. At the same time, the biopharmaceutical company is set to experience great expenses in relation to the initiating and completion of its clinical trials. All-in-all, the risks associated with a potential investment in Nabriva Therapeutics are high, but the risk/reward potential might turn out to be quite generous for current and potential investors.