D.E. Shaw, Arrowstreet Bets Pay Off With Biogen Drug Revival

(Bloomberg) -- Biogen Inc. shareholders who stuck around despite dimming prospects for the company’s experimental Alzheimer’s therapy are being rewarded for their patience Tuesday after the shocking plans for the drug’s return triggered a record rally in the share price.

Shares of the drugmaker surged 38% to $308.42 at 9:38 a.m. in New York, almost completely erasing losses from when the drug failed an analysis back in March. RBC Capital analyst Brian Abrahams wrote that Biogen’s plans to file for approval early next year bring “back to life a drug that had been completely left for dead.”

The surprising move is likely to provide a large boost to funds including DE Shaw & Co. and Renaissance Technologies LLC, which added to their positions in the aftermath of March’s failure, filings compiled by Bloomberg show. DE Shaw added more than 1.5 million shares to its position between March 31 and June 30 while Renaissance Technologies boosted its stake by more than 850,000 shares. The stock traded between $219.20 and $245.35 over that period, which stands in stark contrast to Tuesday’s peak of $318.

The value added in Tuesday’s trading is worth $218 million for DE Shaw and $211 million for Renaissance, using the June 30 holdings. Arrowstreet Capital LP, which held almost 2.5 million shares as of June 30 and bought 778,000 shares in the quarter prior, is on track to see its holdings boosted by $212 million, assuming its holdings have remained the same.

Money managers aren’t the only ones celebrating today’s news and Biogen’s surge. The company’s chief executive, Michel Vounatsos, bought $1 million of shares at an average price of $231.48 back in May. His total position, roughly 22,000 shares according to Bloomberg data, is now worth more than $6.7 million. Other insiders including Chairman Stelios Papadopoulos and Chief Legal Officer Susan H Alexander hold positions worth roughly $10 million each.

Among hedge funds, AQR Capital Management LLC is reaping big benefits from its bet on the Cambridge, Massachusetts-based company. The fund’s position as of June 30 was 3.8 million shares, which would equate to a $322 million gain on Tuesday’s share move.

The investors weren’t immediately able to be reached for comment before normal business hours.

To contact the reporter on this story: Bailey Lipschultz in New York at blipschultz@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Richard Richtmyer

©2019 Bloomberg L.P.