The Janus Henderson Biotech Innovation Fund continues to lead all biopharma and life sciences hedge funds after mixed results for the general strategy in September. Several funds lost money last month; others had small increases. As a result, heading into the fourth quarter, there is a wide gulf between the top and bottom performers for the year.
The Janus Henderson funds rose less than 1 percent in September but are still up 39.35 percent for the year, according to a hedge fund database.
“In recent months, as uncertainty about the economy has grown, health care has benefited from a rotation into more defensive stocks,” portfolio managers Andy Acker and Dan Lyons stated in a recent report titled “Healthcare Stocks Shine in a Dimming Economy.” They explained, “In our view, the setup for the sector remains attractive. Still-reasonable valuations, falling interest rates, a quiet U.S. election cycle (at least for health care), and rapid innovation all make the case for the sector’s momentum to continue.”
The Janus Henderson fund has not lost money since its January 2020 launch, according to the database.
Casdin Capital is also enjoying a strong year. The firm’s share class that invests only in public securities is up 34 percent after gaining 1.5 percent last month, an investor says. It is still far below its high-water mark, however. Three names combined accounted for nearly 40 percent of the firm’s U.S. stock portfolio at the end of the second quarter: BioLife Solutions, Revolution Medicines, and Sarepta Therapeutics, according to a regulatory filing.
Institutional Investor previously reported that Averill Partners is up 21.4 percent for the year after surging by 70 basis points last month. The fund is closing to new investors on November 1. Averill, which generally runs a low net exposure, has been led this year by Arcutis Biotherapeutics, which researches treatments for dermatological diseases; Biohaven, which develops treatments in areas such as immunology and neuroscience; and Insmed, a biopharma company working on therapies for serious diseases.
Perceptive Advisors had a strong month in September, climbing 4.3 percent. But it is up only about 8 percent for the year, significantly lagging the overall market, says someone who has seen the results.
Cerevel Therapeutics was Perceptive’s largest long position at the end of the second quarter, accounting for more than 10 percent of U.S. assets. In August, AbbVie completed its acquisition of the company for $45 per share.
Perceptive’s next two largest long positions were Amicus Therapeutics, which develops medicines for genetic diseases, and Arcellx, a biotech focused on innovative immunotherapies. Earlier this week, Needham & Co. raised its price target on Arcellx from $81 to $96.
RA Capital Management gained 1 percent last month and is up 14.5 percent for the year. Other biopharma-focused hedge funds, however, lost money in September — though most remain in the black for the year.
Avoro Capital Advisors dropped 5.5 percent last month but is up 12.5 percent for the year. Shares of United Therapeutics, its largest long position, accounting for more than 12 percent of assets, are up more than 60 percent for the year.
Avoro’s No. 2 long Madrigal Pharmaceuticals dropped more than 14 percent in September. Soleus Capital lost 2.1 percent last month but is still up 11.5 percent for the year. RTW Investments dropped 2.5 percent for the month and is up 12.5 percent in 2024. Cormorant Asset Management shed 40 basis points and is up just 1 percent for the year.
EcoR1 Capital may be in the worst shape. It lost 5.8 percent in September. But unlike the other funds, it is in the red so far this year, down 11.4 percent. In September, shares of Apellis Pharmaceuticals, EcoR1’s largest long, accounting for more than 13 percent of assets, plunged nearly 26 percent.