Hedge Funds Are Buying These 2 Biotech Stocks
Apr 26 2013, By: Equity Funds Guru
One of the top biotech hedge funds in the world, Baker Brothers, has recently raised their stake in Acadia. In fact, the fund roughly tripled their previous holdings and now owns just under 30% of Acadia. That is a massive investment and shows a lot of faith in Acadia. In total, their ownership stands at 15.6 million shares.
I am waiting for pullback to buy more ACAD. Check out tBaker Bros other investment Insmed (INSM) - been taking off recently - chart reminds of ACAD late last yr. . Fidelity and RA Capital - other large owners of ACAD also own INSM...Think INSM will be my next multibagger stock....=)
The best stock to study is Incyte where Baker Bros took a very large position when it was still quite inexpensive. They also took a BOD seat. The situation is very similar. I think we all know how much money investors made there. It's going to be really hard for other funds to muscle Acadia around and it's going to be harder for large pharma companies to get great terms in licensing or M&A.
IMO, it's likely that Acadia will end up partnering worldwide rights or will be bought out. They don't have the infrastructure for a drug launch. They're actually set up perfectly for M&A, but the price isn't close to high enough. Licensing is interesting, but they're going to have to trust the partner. Biovail bailed after the merger with Valeant. I can promise you that Valeant is licking wounds from that decision. Pfizer, Lilly and AstraZeneca are really obvious partner or M&A candidates. Forest is smaller, but they have revenue to replace and this looks like a great fit. All my opinion, but Acadia is sitting pretty on a tee for the right group to take the big swing.
This is based on #'s reported in JANUARY lol. Nice try on the pump. A lot has happened since January such as the stock going up about 1000%. THey're likely mostly out by now. NIce try though!
Sentiment: Strong Sell