Jana Partners' Barry Rosenstein this week liquidated his activist position in Whole Foods (WFM) at a major profit, in a move that completes an activist campaign that propelled the organic grocer to sell itself to Amazon.com Inc. (AMZN) in an industry-transforming $13.7 billion deal.
The sale marked a major victory for Jana Partners, which in April launched a campaign to have Whole Foods consider selling itself. It also generated a windfall of about $320 million, which Rosenstein will likely invest partly into another insurgency campaign in the coming months.
Jana Partners has a number of existing investments it could transform into fully blown insurgencies by allocating some of its Whole Foods profits. The New York-based fund's next target is likely to be a U.S. corporation with more than $1 billion market capitalization.
One candidate: The activist fund owns a 0.3% stake in Acadia Pharmaceuticals Inc. (ACAD) , a drug company that also features a 0.6% investment by another major activist, Elliott Management's Paul Singer. The company has frequently been mentioned as a potential buyout target, but Jana or Elliott (or both) could significantly increase their positions and agitate for a deal if one doesn't happen soon.
Research firm Leerink had previously cited Biogen Inc. (BIIB) , Teva Pharmaceutical Industries Ltd. (TEVA) , Allergan (AGN) and Pfizer Inc. (PFE) , all of which have some focus on the central nervous system space that Acadia covers, as potential acquirors.
A buyer would need to consider both Acadia's Nuplazid (Pimavanserin) drug for Parkinson's disease and its recent progress on an early stage Alzheimer's disease psychosis program. The company hopes to start a phase 3 study later this year. However, from a buyer perspective, the program carries a significant amount of uncertainty since the study could still fail or be terminated. A buyer may not have a lot of interest in paying full value for the Alzheimer program at this point. Another potential obstacle could be Baker Brothers Investments, a life-sciences fund that is Acadia's largest shareholder with a 21% stake and two seats on Acadia's board.
Another potential Jana target could be WebMD Heath Corp. (WBMD) . Jana recently reported owning a 1.2% stake in the health information portal. In February, WebMD reported hiring J.P. Morgan Securities LLC as a financial adviser to help it conduct a strategic review.
Another activist, Blue Harbour Group's LP, began building a stake in WebMD shortly after the review was announced and now has a 9% stake. Blue Harbour's Clifton Robbins engages in a collaborative behind-the-scenes form of activism.
It's possible that Jana Partners or Blue Harbour could push to have the company sold or broken into two businesses if it doesn't take M&A related steps on its own.
Robbins and his team have had some success encouraging companies to split in two. For example, in 2014, at the annual IMN Active-Passive Investor Summit, Blue Harbour urged Babcock & Wilcox to divide into two businesses, which it ultimately did in a big win for shareholders.