I don't think Baker's over is an adjustment. They've been dumping steadily since quickly accumulating that large position. We can speculate in all directions, but you can bet the downward stock action has not helped YM's negotiating position. Perhaps the conflict of interest with Baker being of INCY's BOD is the problem or perhaps it's something else. Regardless, Baker is running out of powder. I'm never going to be comfortable when one of your largest shareholders has a BOD seat at your biggest competitor. That's just odd. Heck, INCY could probably offer $5/share for YM and get serious traction based on the negative talk going around these days. I think YM's team is doing the right thing by not overreacting to these price swings. All I know is that the downward pressure was systematic and there is one major seller...just happens to be Baker.
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.
As of 11-15-2012 Baker hold 3,111,257 SH in YMI. They are not always right but mostly right. They are a lot smarter than myself especially when it comes to BioTech. One advantage they have over us is they get to buy in much cheaper because of the way they invest in the company. What they lost on Tranzyme doesn't mean they are in the red. They bought in very low.
I had no idea that two of T.Rowe Price's best perfroming funds are the 2 biggest Mutual fund holders of YMI according to yahoo. That makes me feel good, as both those funds have been killing it for years now.
PRICE (T.ROWE) HEALTH SCIENCES FUND 3,250,000 2.06 6,467,500 Jun 30, 2012
PRICE (T.ROWE) NEW HORIZONS FUND 2,981,000 1.89 5,544,660 Mar 31, 2012
Sentiment: Strong Buy