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Vanda Pharmaceuticals Inc (VNDA): Deerfield Management Increases Exposure Following Positive Announcement

James Flynn’s Deerfield Management disclosed an increase in its stake in Vanda Pharmaceuticals Inc (NASDAQ:VNDA) on Friday. After adding more than 1.9 million shares to its holdings, the fund now owns 4.13 million Common Shares, which represent 10.44% of the firm’s outstanding stock.

Deerfield Management is a hedge fund based in New York and focuses primarily on investments in the healthcare sector. The investment firm, which has been managed by James Flynn since 2000, has been growing continuously over the past few years, and most recently disclosed an equity portfolio worth about $2.74 billion. Funding research & development, advising on financial matters, and conducting hostile takeovers, are just some of Deerfield Management’s specialties, which have contributed to its success in the healthcare industry.  Thus, the lack of diversification in its equity portfolio, has allowed the fund to thrive and develop extensive knowledge in this sector.

Vanda Pharmaceuticals Inc (NASDAQ:VNDA) is a $515.9 million market cap biopharmaceutical firm based in Washington DC. The company’s portfolio includes a wide range of products, ranging from sleeping disorder treatments, to drugs for schizophrenia. Vanda Pharmaceuticals Inc (NASDAQ:VNDA) develops and commercializes these specialized products successfully since 2002, and has recently turned into a very sought after stock.

Vanda Pharmaceuticals Inc. (NASDAQ:VNDA)

Much like Deerfield Management, other industry bulls have also been betting on Vanda Pharmaceuticals, especially since the biotech firm announced the settlement of the licensing arbitration proceedings with Novartis AG (NYSE:NVS) earlier this month. Shareholders became not only excited, but very optimistic, as the biotech company acquired the rights to distribute its Fanapt – a schizophrenia treatment – in the US and Canada. The good news for Vanda Pharmaceuticals resulted in a surge in share prices, which had been stagnant since August. The hedge fund run by James Flynn was certainly motivated by this positive announcement, when it decided to further increase its exposure to the biopharmaceutical firm.

Apart from Deerfield Management, which has turned into the second largest institutional investor in Vanda Pharmaceuticals Inc (NASDAQ:VNDA) following their most recent acquisition, other important hedge funds are also betting heavily on this stock. Just a small percentage ahead of Deerfield Management, is Julian and Felix Baker’s Baker Bros Advisors, with a stake of more than 4.37 million shares. William Leland Edwards’ Palo Alto Investors is also bullish regarding Vanda Pharmaceuticals, holding more than 3.28 million shares, which constitute around 2.54% of their equity portfolio. Nevertheless, Deerfield Management has been the most active in terms of increasing their exposure to the biotech company, as their numerous stock acquisitions over the past year have demonstrated.

Disclosure: Pablo Erbar holds no position in any stocks or funds mentioned.

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