https://www.barrons.com/articles/biotech-stocks-1538083965
4 Beaten-Up Biotech Stocks Big Investors Are Buying Now
Ed Lin
Sept. 28, 2018 5:00 am ET
DANIEL MIHAILESCU/AFP/Getty Images
As the third quarter comes to a close, big investors have been buying biotech stocks that are in the red for the year to date.
Barron's calculates that has been a total of nearly $46 million in recent stock purchases in Acadia Pharmaceuticals (ACAD), Molecular Templates (MTEM), Foamix Pharmaceuticals (FOMX), and Amicus Therapeutics (FOLD). Through Thursday, those stocks had suffered respective year-to-date drops of 28%, 47%, 4.7%, and 15%.
Biotech investors Felix and Julian Baker were the largest shareholders in Acadia—which focuses on disorders of the central nervous system— even before they bought more stock last week. The Bakers disclosed in a filing with the Securities and Exchange Commission that, through entities they control, they paid $22.6 million on Sept. 20 for a total of 1.21 million additional shares, paying an average of $18.70 each. They now own 28.6 million Acadia shares, a 22.8% stake.
Acadia shares cratered 20% the day after the company reported fourth-quarter results after the market closed Feb. 27. Shares have given up more ground since then. The Bakers' latest purchases are their first buys of Acadia stock since August 2016, when they bought 1.3 million shares for $43 million in a public offering that was priced at $33 a share.
A representative of the Bakers didn't return a phone call Thursday seeking comment on the stock buy.
Molecular Templates shares soared 52% on Sept. 19 when the company announced a partnership with Takeda Pharmaceutical to develop a treatment for diseases such as multiple myeloma. Molecular Templates will receive an upfront payment of $30 million, and receive up to $632.5 million in development, regulatory, and commercial milestone payments.
Even with that pop, however, Molecular Templates shares have lost nearly half their value this year. Nonetheless, the company earlier this week closed a successful public offering of 9.4 million shares at $5.50 each. Venture-capital firm Longitude Capital Managementbought 365,000 additional Molecular Templates shares in the offering for $2 million, raising its investment to 4.71 million shares, a 12.4% stake. Those holdings include 1.45 million shares issuable upon the exercise of warrants.
Longitude didn't return an email seeking comment on the purchase.
Longitude wasn't the only investor that has picked up Molecular Templates shares. Joseph Edelman's Perceptive Advisors, which oversees hedge fund Perceptive Life Sciences, disclosed Thursday that as of Tuesday it owned 1.98 million Molecular Templates shares, a 5.6% stake, up from 724,133 shares owned at June 30. The filing was triggered because Perceptive's ownership topped the 5% ownership threshold, but it's not clear when the additional 1.25 million shares were purchased. If they were bought in Molecular Templates' public offering, they would have cost about $6.9 million.
A subsidiary of hedge fund the Caxton Associatesbought 545,454 Molecular Templates shares in the public offering, paying a total of $3 million. Caxton now owns 1.6 million Molecular Templates shares.
Caxton didn't immediately return a phone call seeking comment on the buy.
Just last week we reported that Perceptive was buying more shares of Amicus, which focuses on rare metabolic diseases. Perceptive disclosed this week that it has bought even more, paying $626,500 for 50,000 more Amicus shares, about $12.53 each. The investment firm now owns 20.7 million shares, and remains Amicus's largest shareholder.
On Monday, Perceptive said that as of Sept. 14 it owned 3.3 million Foamix shares, a 6.3% stake in the biotech, which develops dermatological drugs. It's not clear when Perceptive bought 2.2 million more Foamix shares—it owned 1.1 million shares as of June 30. The additional shares, based on the closing price of $6.18 on Sept. 14, have an aggregate value of $13.5 million.
Perceptive didn't return an email seeking comment on the purchase.
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Write to Ed Lin at edward.lin@barrons.com