Misadventurous Hedge Fund Has Some Routine Holdings - TheStreet

Updated from 2:40 p.m. EDT

Scott Sacane's Durus Capital Management, the hedge fund that "inadvertently" ran up huge stakes in medical companies

Esperion Therapeutics

(ESPR) - Get Report




, also has significant positions in several other small medical companies.

Durus' positions in these companies don't approach the dominant stakes he recently disclosed in Esperion and Aksys -- 33% and 76.7%, respectively. But given Sacane's behavior with those two companies, investors might want to recalculate the risks of a company in which he is a major investor.

As reported Tuesday, Durus had

significantly increased its ownership stakes in Esperion and Aksys in recent months to become a major shareholder in the two small medical companies, without formally disclosing the stakes to regulators. Durus said it "inadvertenly purchased" the shares. The revelations fueled speculation by short-sellers in the stocks and others that the fund might have bought the shares to bid up their prices and improve the fund's performance.

Durus holds several other large but so far uncontroversial positions in other medical companies as well. Most companies listed below didn't return calls Wednesday.

Durus is the leading institutional investor of

Allos Therapeutics

( ALTH), a Westminster, Colo.-based company developing drugs to improve the efficacy of radiation therapy and chemotherapy for cancer patients. By April, Sacane's fund had secured 5.9 million shares, or 23%, and is the biggest institutional shareholder.

David Bouchey, an analyst who follows Allos, said he didn't think Sacane's large stake would prompt the company to prepare a poison-pill defense.

Bouchey, of C.E. Unterberg, Towbin, recalled that he spoke to Sacane three to six months ago, adding that the hedge fund manager viewed Allos as "a potential home run" and expressed no interest in influencing management.

Bouchey has short-term market perform and long-term market perform ratings on Allos. He doesn't own the stock and his firm doesn't have an investment banking relationship.

Durus also is the second-biggest institutional shareholder of


(NOVT) - Get Report

, a Norcross, Ga., company that makes and sells a device that delivers low-dose radiation to help prevent the reclogging of narrowed arteries. The device is applied to the site of the artery, which has been kept opened by a stent. Durus owned 1.74 million shares, or 10.64%, as of March 31. The largest institutional shareholder is Liberty Wanger Asset Management, with 13.83% of the company's shares.

Durus also holds the largest institutional stake in

Cardiac Science

( DFIB), of Irvine, Calif. As of March 31, Durus owned 3.29 million shares, or 4.9% of the company that makes defibrillators for monitoring and treating life-threatening irregular heartbeats.

A company spokesman said Wednesday that it would be difficult to assess the stock impact of the publicity over Durus because Cardiac Science released its quarterly earnings Wednesday. The company's shares gained 6 cents, closing at $2.60.

The spokesman said Durus has had "no impact" on management, adding that "the situation hasn't prompted any management initiatives" to create a poison pill. "

Sacane is just a shareholder, and that's it," the spokesman said.

Durus also is the biggest shareholder of

Vicuron Pharmaceuticals

( MICU), of King Of Prussia, Pa., which is developing antibiotics and antifungal medications. Durus owned 2.3 million shares, or 4.8%, as of March 31.

Last week, Vicuron announced it had priced a public offering of 6 million shares at $13.85 a share. The stock closed Wednesday at $12.98, down 3 cents.

"I'm not sure there's anything spectacular related to his

Sacane's holding

in Vicuron," said Thomas Shrader, who tracks the company for Harris Nesbitt Gerard, a co-manager on the public offering.

"For me, this is a stock that you buy and hold," said Shrader, who has an outperform rating on Vicuron, but he doesn't own shares. "I guess in the shorter term, it could hurt if he

Sacane sells his shares, but I doubt he would."

And Durus also holds the third-largest institutional stake in

Guilford Pharmaceuticals

( GLFD), a Baltimore-based maker of cancer drugs for brain tumors. As of March 31, Durus held 1.25 million shares, or 4.2%.

Most of the attention in recent days has been paid to Esperion Therapeutics, of Ann Arbor, Mich., a company trying to develop heart disease drugs based on cholesterol research, and Aksys, of Lincolnshire, Ill., which provides dialysis systems for patients with severe kidney disease.

Esperion, which hit a 52-week high of $21.17 on July 25, fell to $15.20 on Wednesday, down $2.18, or 12.5%.

But Aksys, which started the day declining, rebounded with a gain of 86 cents, or 10.2% to close at $9.35.

The stock had been falling fast since achieving a 52-week high of $15.85 on July 24. The next day, the company announced that Sacane's group owned more than 20 million of Aksys' 29.7 million shares, starting the stock's decline.