Why Steve Cohen Added CymaBay Therapeutics Inc (CBAY) to His Portfolio?

CymaBay Therapeutics Inc (NASDAQ:CBAY) has been recently added to Steve Cohen‘s equity portfolio, as a new filing with the Securities and Exchange Commission revealed. Mr. Cohen and his fund, Point72 Asset Management, own around 844,900 shares of the biopharmaceutical company. The passive stake amasses 5.8% of the company.


The company was previously named Metabolex and was renamed as CymaBay Therapeutics Inc (NASDAQ:CBAY) in December following a capital restructuring. The company first listed on the over-the-counter market and this summer moved to the NASDAQ market. In July, the company conducted a public offering and sold 4.60 million shares at $5.50 apiece. With the stock growing to $8.76, investors have benefited significantly from the company’s appreciation.

With the capital restructuring, CymaBay Therapeutics Inc (NASDAQ:CBAY) is focused on its clinical portfolio, which comprises three compounds for the unmet medical needs in the metabolic diseases. The compounds are currently in the Phase 2 clinical development and at the end of September, CymaBay said that it has completed the enrollement of patients with gout for its clinical trial of arhalofenate product. The results from the trial are expected to be anounced during the second quarter of 2015.

The company also managed to improve its financial situation during the last quarters. During the second quarter, CymaBay increased its revenue to around $4.0 million, from $3.0 million in the previous quarter and narrowed its net loss to $0.56 per share from $1.02 per share in the first quarter.

Despite the fact that institutional investors have not yet revealed ownership of CymaBay Therapeutics Inc (NASDAQ:CBAY) in their equity portfolios, last month, the company’s Chief Financial Officer, Sujal Shah, revealed the acquisition of 10,000 shares at $7.44 apiece. Moreover, according to CymaBay’s S-1 filing with the SEC, one of the largest stockholders of the company is James Flynn, one of the best investors in the healthcare sector, which owned around 593,200 shares before the company’s IPO.

Moreover, Mr. Cohen is known for his keen stock-picking skills which often show solid and even impressive returns. One example that springs to mind involving the healthcare sector is Intercept Pharmaceuticals Inc (NASDAQ:ICPT). In November 2013, Mr. Cohen’s previous hedge fund, SAC Capital Advisors, disclosed boosting its stake in the company to 5.3%. Later in January, the stock of Intercept surged by 600% within one day, registering the highest intraday growth in the NASDAQ history, that came on the back of the company reporting positive results on one of its trials.

With this in mind, CymaBay Therapeutics Inc (NASDAQ:CBAY) represents a relatively cheap investment, although further research into its development and trials. And even though the current stake amasses a small amount of Mr. Cohen’s equity portfolio, it might bring him a significant profit over time.

Disclosure: none