Most hedge funds that specialize in life sciences and biopharma stocks posted strong results in July. Several are up by double-digit percentage rates for the year.
The top performer this year appears to be Casdin Capital. It reported to investors that its share class that invests only in public securities has surged nearly 40 percent after rising nearly 15 percent in July and 11 percent in June, according to an investor.
It is not clear how the fund’s class that includes private investments is performing or how many companies are in that portfolio, notes a frustrated investor.
Casdin’s four largest longs as of the end of the first quarter (second-quarter 13F holdings are due out by Wednesday) accounted for nearly half of U.S.-listed assets. They are Revolution Medicines, Standard BioTools, BioLife Solutions, and Sarepta Therapeutics. Year-to-date, their stocks are up more than 50 percent, down nearly 30 percent, up 60 percent, and up about 32 percent, respectively.
Otherwise, the-top performing biopharma hedge fund this year is Janus Henderson’s Biotechnology Innovation composite. It posted a 4.3 percent gain last month, bringing its increase for the year to 33.5 percent, according to the firm’s website. The firm’s hedge fund specializing in the composite was launched in early 2020. The composite includes longs, often smaller and less liquid companies, private companies, and shorting, which helped performance when the sector was selling off in recent years.
Elsewhere, Avoro Capital Advisors jumped 7.2 percent in July and is now up nearly 20 percent for the year, an investor says. It was essentially flat at the end of May. Avoro is much less concentrated than Casdin. Its three largest longs made up a little more than 22 percent of assets at the end of March.
Its largest long, United Therapeutics, is up nearly 50 percent for the year even though it was down in July. The biopharma develops pharmaceuticals and technologies for patients with lung and other diseases. No. 2 long Apellis Pharmaceuticals has dropped more than 40 percent for the year. It is working to develop therapeutic compounds for autoimmune and inflammatory diseases.
RTW Investments saw a 6.92 percent gain in July in its flagship fund — which includes publics and privates — extending its rise for the year to 17.83 percent, according to two sources, including an investor. Interestingly, its largest long, Rocket Pharmaceuticals, a late-stage biotech company that creates gene therapies for rare diseases, is down about 36 percent this year. Its second-largest long, Immunocore Holdings, which develops drugs that use soluble T-cell receptor technology, is off by nearly 50 percent. The two stocks combined to account for more than 12 percent of assets at the end of the first quarter.
RA Capital Management, for its part, rose 5.4 percent in July and is now up 13 percent for the year, an investor says. Its largest long, Ascendis Pharma, represented more than 18 percent of U.S. assets at the end of the first quarter. Year-to-date, the stock is up a little more than 3 percent. On Monday, the company said the Food and Drug Administration had approved its Yorvipath as the first treatment for hypoparathyroidism, a rare endocrine disease. No. 2 long Vaxcyte is up about 25 percent this year. The company aims to eliminate bacterial infections such as invasive pneumococcal disease.
Elsewhere, Soleus Capital Management climbed 3 percent in July and is up 8.8 percent for the year, say two people who have seen the results. Averill Partners’ class that invests in privates rose 1.6 percent in July and is up 14.8 percent for the year.
Several funds enjoyed strong performances in July but remain in the red for the year. For example, Perceptive Advisors gained 7.5 percent last month but is still down 1.5 percent for the year, per someone who has seen the results.
Redmile Group increased by 6.2 percent in July but is down 8.6 percent for the year. And EcoR1 Capital surged 10 percent last month but remains down 7 percent for the year.