In this article, we discuss the top 10 healthcare stock picks of Timothy P. Lynch’s Stonepine Capital.
Timothy Lynch is the managing member at Stonepine Capital, which is an investment management firm based in Bend, Oregon. The Q3 13F portfolio at Stonepine Capital is primarily focused on the life science industry, with the largest stock holding being Amryt Pharma plc (NASDAQ:AMYT), which represents 31.79% of the firm’s total securities.
Timothy Lynch attended the Colgate University and Harvard Business School, and began his career as an investment banker, serving at The Goldman Sachs Group, Inc. (NYSE:GS) and Chase Manhattan Bank. Lynch then joined Elan Corporation as the director of strategic planning, and executed acquisitions and corporate financings. After Elan, he joined InterMune, Inc. as the chief financial officer, a private start-up that he turned into a success. Timothy Lynch was also the CFO at Tercica, Inc., a start-up that he played an instrumental role in developing and managing. After Tercica, he moved on to Stonepine Capital, where he has been working for 12 years now.
As per the 13F filings from Q3 2021, Stonepine Capital has a portfolio valued at $219.76 million, and assets under management of $246.86 million. Almost 97% of Lynch’s Q3 portfolio consists of healthcare stocks.
The top stocks from Timothy Lynch’s portfolio as of September this year include Amryt Pharma plc (NASDAQ:AMYT), CTI BioPharma Corp. (NASDAQ:CTIC), Adamas Pharmaceuticals, Inc. (NASDAQ:ADMS), and Galapagos NV (NASDAQ:GLPG), among others discussed in detail below.
Our Methodology
We used the Q3 portfolio of Timothy Lynch to compile a list of his top 10 stock picks from the healthcare sector. The stocks are ranked according to Timothy Lynch’s Stonepine Capital’s stake value in each holding.
For an in-depth context about each company, we have mentioned the Q3 earnings, analyst ratings, and the hedge fund sentiment surrounding each stock.
Timothy P. Lynch’s Stonepine Capital Portfolio: Top Healthcare Stocks
10. Gamida Cell Ltd. (NASDAQ:GMDA)
Stonepine Capital’s Stake Value: $6,759,000
Percentage of Stonepine Capital’s 13F Portfolio: 3.07%
Number of Hedge Fund Holders: 12
Gamida Cell Ltd. (NASDAQ:GMDA), a company engaged in complex cell therapy to treat blood diseases and blood cancer, is one of the top stock picks of Timothy Lynch from the third quarter, with his investment firm holding 1.72 million shares in the company, worth $6.75 million. Gamida Cell Ltd. represents 3.07% of Stonepine Capital’s Q3 13F securities.
As of September this year, 12 hedge funds in the database of Insider Monkey reported owning stakes in Gamida Cell Ltd., valued at $26.6 million. This is compared to 14 funds being bullish on Gamida Cell Ltd. in the preceding quarter, with a total stake value of $53.2 million.
Gamida Cell Ltd. announced Q3 earnings on November 15, with EPS for the quarter being -$0.33, beating estimates by $0.15. Following the Q3 results, Oppenheimer analyst Mark Breidenbach on November 16 lowered the price target on Gamida Cell Ltd. to $15 from $17 and kept an Outperform rating on the stock.
The leading Gamida Cell Ltd. stakeholder as of Q3 is Rock Springs Capital Management, with 2.14 million shares amounting to $8.4 million.
In addition to Amryt Pharma plc (NASDAQ:AMYT), CTI BioPharma Corp., Adamas Pharmaceuticals, Inc., and Galapagos NV, Gamida Cell Ltd. is a notable stock from Timothy Lynch’s Q3 portfolio.
9. Affimed N.V. (NASDAQ:AFMD)
Stonepine Capital’s Stake Value: $7,178,000
Percentage of Stonepine Capital’s 13F Portfolio: 3.26%
Number of Hedge Fund Holders: 19
Affimed N.V. (NASDAQ:AFMD), a clinical stage biopharmaceutical company specializing in immuno-oncology therapies, posted its Q3 earnings on November 10. EPS in the period totaled -$0.16, beating expected EPS by $0.03. The $9.94 million revenue was down 20.13% from the prior-year quarter, but outperformed estimates by $1.34 million. On November 17, Berenberg analyst Zhiqiang Shu initiated coverage of Affimed N.V. with a Buy rating and a $11 price target.
Timothy Lynch’s Stonepine Capital holds 1.16 million shares in Affimed N.V., worth $7.1 million, representing 3.26% of the firm’s total investments from the third quarter.
Of the 867 hedge funds tracked by Insider Monkey at the end of September this year, 19 funds were long Affimed N.V., with total stakes valued at $156.3 million. The leading stakeholder of the company is Ari Zweiman’s 683 Capital Partners, with a $34.6 million stake in the company.
8. Apollo Endosurgery, Inc. (NASDAQ:APEN)
Stonepine Capital’s Stake Value: $8,264,000
Percentage of Stonepine Capital’s 13F Portfolio: 3.76%
Number of Hedge Fund Holders: 10
Offering an alternative to invasive surgeries, Apollo Endosurgery, Inc. (NASDAQ:APEN) develops medical devices that treat a variety of gastrointestinal conditions in a less invasive manner. Stonepine Capital holds an $8.26 million stake in Apollo Endosurgery, Inc., which accounts for 3.76% of the firm’s Q3 13F portfolio.
Apollo Endosurgery, Inc. reported Q3 results on November 1. EPS in the period equaled -$0.23, exceeding estimates by $0.05. The $16.35 million revenue for the third quarter was up 27.48% from the previous-year quarter, beating estimated revenue by $0.88 million.
Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management is the leading shareholder of Apollo Endosurgery, Inc., with 2.51 million shares worth $22.78 million. Overall, Insider Monkey’s Q3 database reported that 10 hedge funds were bullish on Apollo Endosurgery, Inc., with a total stake value of $61.73 million.
7. Strongbridge Biopharma PLC (NASDAQ:SBBP)
Stonepine Capital’s Stake Value: $9,159,000
Percentage of Stonepine Capital’s 13F Portfolio: 4.16%
Number of Hedge Fund Holders: 11
Strongbridge Biopharma PLC (NASDAQ:SBBP) is a company focused on creating treatments for rare neuromuscular and endocrine conditions. On October 5 2021, Strongbridge Biopharma PLC was acquired by Xeris Biopharma Holdings, Inc. (NASDAQ:XERS). Timothy Lynch, via Stonepine Capital, holds a $9.1 million stake in the company as of Q3, which accounts for 4.16% of the firm’s total investments.
As of the third quarter of 2021, 11 hedge funds in the database of Insider Monkey were long Strongbridge Biopharma PLC, with a total stake value of $29.8 million. This is comparable to 12 funds being bullish on the company in the previous quarter, with total stakes amounting to $39.6 million.
David Rosen’s Rubric Capital Management is one of the leading Strongbridge Biopharma PLC stakeholders, holding over 3 million shares worth $6.26 million.
6. Catalyst Biosciences, Inc. (NASDAQ:CBIO)
Stonepine Capital’s Stake Value: $10,830,000
Percentage of Stonepine Capital’s 13F Portfolio: 4.92%
Number of Hedge Fund Holders: 17
Catalyst Biosciences, Inc. (NASDAQ:CBIO), one of the top stocks from Lynch’s Q3 portfolio, is a clinical research and development biopharmaceutical company offering protease therapeutics that treat disorders of the complement system. Stonepine Capital holds a $10.83 million position in Catalyst Biosciences, Inc., representing 4.92% of the firm’s total investments.
Catalyst Biosciences, Inc. announced that it would pause the clinical development of its primary asset, MarzAA. Piper Sandler analyst Christopher Raymond lowered the price target on Catalyst Biosciences, Inc. to $4 from $16 and kept an Overweight rating on the shares on November 12.
As of Q3 2021, 17 hedge funds in the database of Insider Monkey were long Catalyst Biosciences, Inc., with total stakes valued at $48.65 million. This is compared to 13 funds holding stakes in the company worth $54.1 million in the previous quarter.
In addition to Amryt Pharma plc (NASDAQ:AMYT), CTI BioPharma Corp., Adamas Pharmaceuticals, Inc., and Galapagos NV, Catalyst Biosciences, Inc. is a notable stock from Timothy Lynch’s Q3 portfolio.
5. Ovid Therapeutics Inc. (NASDAQ:OVID)
Stonepine Capital’s Stake Value: $10,930,000
Percentage of Stonepine Capital’s 13F Portfolio: 4.97%
Number of Hedge Fund Holders: 15
Ovid Therapeutics Inc. (NASDAQ:OVID) is a biopharmaceutical company with several unique medicines in its pipeline, meant for the treatment of rare neurological disorders. As of the third quarter, Lynch’s Stonepine Capital owns 3.25 million shares in Ovid Therapeutics Inc., worth $10.93 million, representing 4.97% of the firm’s total investments.
Ovid Therapeutics Inc. posted its Q3 results on November 10, with EPS for the quarter totaling -$0.17, beating estimates by $0.01.
Mark Lampert’s Biotechnology Value Fund / BVF Inc is the leading shareholder of Ovid Therapeutics Inc., with 6.63 million shares worth $22.28 million. Overall, 15 hedge funds in the Q3 database of Insider Monkey reported owning stakes in Ovid Therapeutics Inc., valued at $65 million.
4. Galapagos NV (NASDAQ:GLPG)
Stonepine Capital’s Stake Value: $12,848,000
Percentage of Stonepine Capital’s 13F Portfolio: 5.84%
Number of Hedge Fund Holders: 22
Galapagos NV is a Belgian pharmaceutical research corporation that is engaged in the clinical stage of small molecule medicines aimed at treating multiple diseases including inflammation and fibrosis. Stonepine Capital owns 244,205 Galapagos NV shares, worth $12.84 million as of the third quarter, representing 5.84% of the firm’s 13F portfolio.
Oleg Nodelman’s EcoR1 Capital is the largest stakeholder of Galapagos NV, with an $82 million stake in the company. Overall, 22 hedge funds reported owning stakes in Galapagos NV, worth $342.5 million as per Insider Monkey’s Q3 database.
3. Adamas Pharmaceuticals, Inc. (NASDAQ:ADMS)
Stonepine Capital’s Stake Value: $19,222,000
Percentage of Stonepine Capital’s 13F Portfolio: 8.74%
Number of Hedge Fund Holders: 14
Adamas Pharmaceuticals, Inc., a company specializing in neurological therapies, is one of the top stock picks of Timothy Lynch’s Stonepine Capital from September this year. The investment firm owns 3.91 million shares in Adamas Pharmaceuticals, Inc., worth $19.2 million, representing 8.74% of Stonepine Capital’s Q3 investments.
Adamas Pharmaceuticals, Inc. was acquired on October 11 2021 by Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN), and now operates as a subsidiary of the acquiring company.
On November 17, Northland analyst Carl Byrnes downgraded Adamas Pharmaceuticals, Inc. to Market Perform from Outperform, keeping an $8.50 price target on the shares to reflect the impending takeover by Supernus Pharmaceuticals, Inc., which he expects to conclude by the end of 2021 or Q1 2022.
Steven Boyd’s Armistice Capital is the largest stakeholder of Adamas Pharmaceuticals, Inc., with 4 million shares valued at $19.64 million. Overall, 14 hedge funds tracked by Insider Monkey were bullish on Adamas Pharmaceuticals, Inc. as of Q3 2021, down from 15 funds in the preceding quarter.
2. CTI BioPharma Corp. (NASDAQ:CTIC)
Stonepine Capital’s Stake Value: $23,495,000
Percentage of Stonepine Capital’s 13F Portfolio: 10.69%
Number of Hedge Fund Holders: 11
CTI BioPharma Corp. is a company investing in cell therapies for blood related cancers. After one of its products failed to deliver desired results for patients hospitalized due to COVID-19, Lake Street analyst Thomas Flaten on October 4 regarded the news as a buying opportunity and kept a Buy rating on the stock with a $15 price target.
CTI BioPharma Corp. posted its Q3 results on November 12. EPS in the period came in at -$0.26, missing estimates by -$0.01. Samuel Isaly’s OrbiMed Advisors is one of the leading stakeholders of the company as of September 2021.
Out of the 867 hedge funds monitored by Insider Monkey as of the third quarter, 11 funds were bullish on CTI BioPharma Corp., with stakes valued at $86.9 million. This is compared to 10 funds holding a position in CTI BioPharma Corp. in Q2, with a total stake value of $74.3 million.
1. Amryt Pharma plc (NASDAQ:AMYT)
Stonepine Capital’s Stake Value: $69,882,000
Percentage of Stonepine Capital’s 13F Portfolio: 31.79%
Number of Hedge Fund Holders: 18
Amryt Pharma plc (NASDAQ:AMYT), a biopharmaceutical company targeting rare and debilitating diseases with its multitude of existing and developing treatments, is the largest holding in Stonepine Capital’s Q3 portfolio. Timothy Lynch, via Stonepine Capital, holds 5.8 million Amryt Pharma plc (NASDAQ:AMYT) shares, worth almost $70 million, representing 31.79% of the firm’s portfolio of Q3 securities.
Glenn Russell Dubin’s Highbridge Capital Management is one of the leading stakeholders of Amryt Pharma plc (NASDAQ:AMYT), holding a $19.75 million stake in the company. Overall, 18 hedge funds in the database of Insider Monkey were long Amryt Pharma plc (NASDAQ:AMYT) as of Q3 2021, up from 11 funds in the preceding quarter.
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This article is originally published at Insider Monkey.
