EXCERPT: Trius Therapeutics Inc. (TSRX): TSRX is a biotech focused on the development of antibiotics for serious, life-threatening infections. Mega funds together added a net 5.32 million shares in Q1 to their 2.78 million share prior quarter position in the company, and taken together mega funds held $48 million or 21.0% of the outstanding shares.
The top buyers was Wellington Management, one of the largest private independent investment management companies in the world, with $634 billion in assets under management, that purchased 3.70 million shares. Other large mega fund purchasers included Vanguard Group (0.62 million shares), with $1.7 trillion in assets under management, and T Rowe Price Associates (0.32 million shares), with $520 billion in assets under management. Overall, institutional investors loaded up on TSRX in Q1, adding 10.03 million shares to their 7.46 million share prior quarter position.
The driver for TSRX is Tedizolid Phosphate, currently in phase 3 trials for the treatment of acute bacterial skin and skin structure infections, including methicillin-resistance Staphylococcus aureus (MRSA). MRSA has recently emerged to be a significant threat in hospital and nursing-home settings, where patients with open wounds and weakened immune systems are particularly at risk. In fact, in 2005, more than 18,000 deaths were attributed to MRSA, more than the 16,000 people that died from HIV/AIDS in the same year.
The prospects for the drug received a boost recently, when the US Congress with bipartisan support two weeks ago approved 92-4 the Prescription Drug Users Fee Act that contains key incentives for antibiotic drug developers such as TSRX, under the Generating Antibiotic Incentives Now or GAIN Act. The first of phase 3 trials met both primary and secondary endpoints, and the second phase 3 trial is currently underway. If approved, the drug is projected to be a blockbuster, with annual peak sales approaching $1 billion. The company currently has over $95 million in cash and cash equivalents, and no debt, and trades at a market-cap of $230 million, and is a speculative bargain at these levels.