Zimmer Holdings Inc. (ZMH), Avalanche Biotechnologies Inc (AAVL), Wright Medical Group Inc (WMGI): Ghost Tree Capital’s Top Biotech Stocks

Avalanche Biotechnologies Inc (NASDAQ:AAVL) lands in the second position on Ghost Tree’s biotech rnakings, with it owning 125,000 shares at the close of 2014, up 150% from the previous quarter. As we reported earlier today, Avalanche is also a top pick of another healthcare-focused fund, VHCP Management, which also has it placed second in financial relevance in its portfolio. VHCP’s stake was unchanged from the previous quarter at 1.38 million shares.

Avalanche Biotechnologies is up a strong 31.48% since its IPO in August 2014. However it was enjoying a much stronger overall run until early January, when it was up over 100% at one point. Since then shares have crumbled by 37.5%, leaving the stock down a gruesome 31.85% year-to-date as Avalanche announced a new public offering of 2.0 million shares on January 5. The clinical-stage biotech company is developing gene-therapy treatments to treat opthalmic diseases, with AVA-101 for Wet AMD (Age-related Macular Degeneration) being the furthest along. Phase 2 data from that study is expected in mid-2015.

Wright Medical Group Inc (NASDAQ:WMGI) rounds out Ghost Tree’s top 3 biotech picks, and the holding was a new position for the fund during the fourth quarter, as it reported ownership of 235,000 shares. Wright Medical Group, which builds devices and treatments primarily for joint issues, announced fourth quarter results on February 25 that were in line with its preliminary estimates, with revenues of $83.3 million, up 25% year-over-year on a constant currency basis.

The company’s foot and ankle division experienced particularly strong growth, up 39% from the previous quarter, with strong gross margins of 77.1%. Despite that, Wright Medical still suffered a loss of $107 million for the quarter, though that was improved from the $135.2 million loss in the fourth quarter of 2014. Shares are down 5.95% year-to-date. Samuel Isaly’s Orbimed Advisors was the largest shareholder among funds we track, owning 2.53 million shares at the end of 2014. William Leland Edwards’ Palo Alto Investors was extremely bullish on Wright Medical heading into 2015, increasing its position by 145% to 2.04 million shares during the fourth quarter.

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