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  • mdwhittier mdwhittier Dec 4, 2012 10:56 AM Flag

    13f filings Baker Boys

    Baker Bros. rebalance their diversified portfolios as they see fit. The fact that they didn't completely sell out says they see potential in YMI, but their much bigger investment is in INCY related to JAK/2 inhibitors for myelofibrosis.

    The disappointment is that YMI hasn't partnered yet but most likely they are holding out for more favorable terms. Plus, INCY will be at least 2 yrs ahead of YMI in revs. Fortunately, YMI is operating from a position of strength, relative to their cash position. It's still a speculative investment, but a decent speculation, given the anemia response for CYT-387.

    Btw, Baker Bros loss in Tranzyme is pocket change, and in no way reflects their investment acumen. They are the best institutional investors in Biotech land, hands down.

    Sentiment: Hold

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    • My only point with Tranzyme was that the Baker Bros position indicates nothing one way or the other about the promise of a company. They buy just about everything and hope for a positive return in the end. Winners like INCY more than make up for the losers.

      In terms of rebalancing the portfolio, fair enough...but..the fact is that they do hold a BOD seat at INCY and they did build a very large position in YMI (just to sell it off slowly which kept constant downward pressure on the stock) and they have also built a huge position in Galapagos which is developing a selective JAK1 that will take on Incyte's RA drugs. They seem to like the JAK space.

      I can deal with Baker deciding that YM is too close to home or that perhaps they're worried about partnerships. That's all fair enough, but at the end of the day Baker doesn't really matter. What matters is that YMI partners with a company that can compete against Incyte in terms of FDA clout and marketing power. That's going to be needed and I'm quite certain that INCY's because fear is that YM ends up partnering with a group like Pfizer or Celgene because INCY knows that they will lose a hell of a lot of market share when 387 gets to market.

      I don't care about Baker but you can bet your bottom dollar that INCY is watching YM's every single move with absolute horror. Count on that.

    • The Baker Bros also are down big on BCRX after they announced one failure after another the past few months.