Biotech Hedge Fund Bailed on Drugmaker Before Its Depression Treatment Scored
(Bloomberg) -- Baker Bros. Advisors LP, a hedge fund known for making big biotechnology bets, looks to have relinquished its stake in Sage Therapeutics Inc. leading up the drugmaker’s slam-dunk depression study.
Baker Bros., which was among the top 20 holders of the biotech stock at the end of September, sold its final 567,497 shares by the end of 2018, according to a regulatory filing this week. Though it’s possible the fund bought back in during a narrow window in early January, the end of the most recent filing period came a week before Sage’s next-generation antidepressant succeeded in reducing women’s postpartum depression symptoms in a pivotal study, triggering a rally of more than 40 percent.
Baker Bros. didn’t immediately respond to a request for comment.
To be sure, the New York-based hedge fund held just under half a million shares back in 2017 when Sage approached $100 per share after its lead asset saw success in another clinical trial. A U.S. regulatory decision on that first-in-class drug for postpartum depression, dubbed Zulresso, is expected by March 19.
Baker Bros. -- which manages more than $14 billion in assets, according to filings -- separately added more than 8.5 million shares to its already sizable position in Amarin Corp. The latest addition for the fund brings its stake to more than 42 million shares, accounting for about 13 percent of shares outstanding. The Dublin-based drugmaker is outperforming the broader market Thursday, up as much as 3.3 percent.
Piling into stocks ahead of potentially make-or-break study results is nothing new for the hedge fund, a notable example being the Amarin position in September. The cost basis per share for that stock is somewhere in the $7.70-range, according to data compiled by Bloomberg, compared to Wednesday’s close of $17.10. However, the fund was on the opposite end of the spectrum after its $2.9 billion stake in Wilmington, Delaware-based Incyte Corp. likely suffered when the stock cratered more than 20 percent on a drug failure last spring.
The fund’s top-five holdings as of year-end 2018 were Seattle Genetics Inc., Incyte, BeiGene Ltd., Alexion Pharmaceuticals Inc., and Genomic Health Inc. Baker Bros. co-founders Felix and Julian Baker are lead directors for Seattle Genetics, Incyte and Genomic Health, and hold board positions with Alexion and Acadia Pharmaceuticals Inc., another top holding.
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