) -- Hedge funds and other large institutional investors peeled back the curtain this week to reveal a bit about what biotech stocks they were buying and selling during the third quarter.
Funds that manage more than $100 million are required to disclose their equity holdings, options and convertible debt on a Form 13F filed with the Securities and Exchange Commission within 45 days of the end of a quarter. Funds aren't required to report short positions betting on declines. Since these disclosures are lagging, it's also not possible to tell what hedge funds have done with these biotech stocks since Sept. 30 when the third quarter ended.
Still, combing through 13F filings can give individual investors some inkling into where professional investors are placing their biotech investment capital.
On the following pages, you'll find a snapshot of
during the third quarter.
Reported strong sales of its newly launched lymphoma drug Adcetris following the drug's approval in August. Bulls and bears continue to debate Adcetris' long-term commercial outlook.
Baker Brothers picked up another 1.3 million shares of Seattle Genetics to pad its position to 20.6 million shares. Wellington Management also added 2.6 million shares and now owns 15.3 million shares.
Significant sellers of Seattle Genetics in the third quarter included Blackrock Advisers (-1.25 million shares), NEA Management (-662,000 shares) and Brown Investment Advisory (-539,000 shares).
Amarin's stock has come under significant selling pressure due to concerns about the patent protection for AMR101, the company's medicinal-grade fish oil for the treatment of patients with too much fat in their blood. Once approved, AMR101 could generate billions of dollars in sales but only if Amarin can secure the necessary patents and market exclusivity to keep generic competitors at bay.
Healthcor Management sold 2 million shares in the quarter to eliminate its position entirely. Healthcor's foray into Amarin ownership was short-lived, the fund first bought into Amarin in the second quarter.
, Millennium Management and
also ditched their Amarin stakes entirely in the third quarter, while Deerfield Management and Driehaus Capital reduced their respective positions.
Sectoral Asset Management acquired a new 2.65 million-share stake in Amarin during the September quarter. The 3 million-share position initiated by Expo Capital Management in the second quarter remained unchanged at the end of the third quarter.
An underachiever hoping for redemption with an experimental drug for myelofibrosis known as CYT387. YM Biosciences garnered a good amount of attention at June's ASCO cancer conference but then the stock sold off hard. Next up for YM and CYT387 will be phase II data at the American Society of Hematology annual meeting in December.
Healthcor Management picked up another 250,000 shares of YM Bio in the third quarter to bring its holding to 8.65 million shares. Balyasny Asset Management added 961,000 shares to up its position to 5.1 million shares. The hedge fund was a big seller of YM Bio shares in the second quarter.
YM Bio sellers during the quarter include Driehaus Capital (-767,000 shares), NEA Management (-1.17 million shares) and Hutchin Hill Capital (-700,000 shares).
The FDA is expected to announce an approval decision for Incyte's myelofibrosis drug ruxolitinib on Dec. 3. What appeared to a be consensus lock for approval, however, has become a bit shaky following recent reports of serious withdrawal symptoms tied to the drug published by study investigators from the Mayo Clinic. Incyte has dismissed the Mayo concerns but the ultimate arbiter, FDA, has yet to weigh in.
Sectoral Asset Management and Orbimed Advisors added 1.5 million and 868,000 shares, respectively, to their already significant Incyte positions during the third quarter.
Fidelity cuts its Incyte stake in half to 4.8 million shares. Vanguard Group sold 1.6 million shares and now owns 5.5 million shares. Arrowstreet Capital, Driehaus Capital and Diamondback Capital each reduced their relatively small Incyte stakes to zero during the third quarter.
Investors got an early look at results from a
earlier this month. Additional results will be presented at a blood-cancer research meeting next month.
Sectoral Asset Management bought 1.5 million Ariad shares in the September quarter to boost its stake to over 10.3 million shares. Other investors buying Ariad during the quarter were Soros Fund Management, Baker Brothers Advisors and Visium Asset Management.
Alyeska Investments and State Street were the biggest sellers of Ariad shares in the third quarter, each shedding just over 1 million shares.
Medivation shares doubled in value in early November following positive results from a
. Consider this an early holiday gift for any investor who owned the stock.
Deerfield Management, Sectoral Asset Management, Jennison Associates and Orbimed Advisors all added to existing Medivation positions during the September quarter.
Visium Asset Management sold 438,000 shares of Medivation during the third quarter but still owned over 1 million shares.
If owning Medivation shares in the third quarter was a profitable move, holding Targacept shares in the same period proved disastrous following the
in a late-stage study.
Balyasny Asset Management had the misfortune of acquiring 590,000 shares of Targacept in the third quarter, a new position for the fund now worth considerably less. Other "depressed" buyers during the September quarter include Janus Capital Management, Millennium Management and Diamondback Capital.
Targacept's largest hedge fund investor was Visium Asset Management with 1.4 million shares.
hit a rough patch earlier this month when U.S. regulators refused to agree on a design for a pivotal phase III study.
Deerfield Management may be hurting after adding 1.16 million Exelixis shares in the third quarter to what was relatively small position in the second quarter.
On the flip side, Calamos Advisors avoided catastrophe by selling its entire 2.1 million-share position in the September quarter.
Developer of the cancer drug perifosine, Keryx is expected to announce top-line results from a phase III study in colon cancer in the first quarter of next year.
Oxford Asset Management, Deerfield Management and Moore Capital Management all opened new positions in Keryx in the third quarter. Balyasny Asset Management added 163,000 shares to its Keryx position that now totals almost 3.5 million shares.
As previously reported, Fidelity Management sold 4.8 million Keryx shares during the quarter, dropping the mutual fund giant's position down to 875,800 shares at the end of the September quarter. Driehaus Capital Management sold just over 600,000 shares to eliminate its Keryx position. The fund was also a seller in the second quarter.
Derma remains an under-the-radar stock although the company contains to attract gradual institutional investor interest. Derma Sciences is developing a wound-healing drug for the treatment of diabetic foot ulcers. Data from a randomized, controlled phase II study demonstrated strong results. The company intends to meet with the FDA in the first quarter to discuss a phase III study program.
Jennison Associates was a notable first-time buyer in the quarter, adding 900,000 shares.
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--Written by Adam Feuerstein in Boston.
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