In addition to the previously reported increase in Paulson & Co.'s SGYP holdings, note the following from the 6/30 13f's, just released today. (These funds are all concentrated in pharmaceutical/biotech stocks.)
Orbimed Advisors (+2% for the second quarter) added 390k shares of IRWD for a total 12.4m shares. They maintained their 3.12m share position in SGYP, as well as a call on SGYP for 250k shares. (Sounds like a hedging position)
Baker Brothers (the largest and most successful biotech fund, +5.3% for the second quarter) seems to hold no shares in either company. Not a stirring endorsement, since in addition to very large positions in a few companies, such as INCY and SGEN, BB tends to hold token "toe in the water" positions in a couple of hundred smaller companies.
Perceptive Advisors (tends to mimic Baker Brothers portfolio, but did much better in the second quarter, +30%) Added 493k shares of IRWD, a new holding for them. No SGYP.
None of these are, proportionately, very large positions, and we should keep in mind that these holdings are as of 6/30 and may have changed in the interim.
According to Paulson's 13f, which was just released, during the second quarter he added 3,685,900 shares of SGYP. This brought his holdings at 6/31 to 5,781,500 shares, or roughly 6% of the shares outstanding.
When stocks drop without any explanation, the natural reaction is "They must know something." However, the pattern here once again today was stock thrown in at the market at the open, driving the price down. This is the way someone with an existing short position might try to sow panic. But it is not the way that a large holder with inside knowledge would unload a position. When an investment bank downgrades a stock, they are almost obliged to make it go down. The Morgan analyst hasn't really done ZSPH any good, since he seems to disparage the whole category. I have some open buy orders in in case the dunk it again in the morning.
Since August 5, there have been 7 posts on the IRWD board - 5 of these were from "equityvaluation" and 2 were from me. Today alone, there were 102 posts on the SGYP board. Which is a considerable drop from a couple of weeks ago. A lot of the smaller fry were playing this via call options, which have been wiped out. I actually owned a couple of thousand shares @ 8.68, since I was convinced that they would run it up again in advance of expiration. I threw in the towel yesterday. It's over. Linzess is taking a dominant position in the category. Moral: A t_rd in the bowl is worth two in the bush.
You mean like The Hindenburg?
Yep, missed Cory Davis. But whatever he said this morning, he seems to have dropped the stock almost 6%. And since ronsmithsom54 (whatever happened to him?) posted his little screed on Aug 2 about "Synergy is soaring and Ironwood is falling", Synergy has dropped over 17% and Ironwood is up 11%. Oh well, back to Dennis the Menace.
In keeping with my theory, I wonder if those 27,500 shares were really thrown in at 24.80. I suspect that they were thrown in at the market, which took it all the way down to 24.80. In other words, they had to take it down from the closing price of 25.88 to 24.80 before they found enough buy orders to sop up those 27,500 shares. If you really wanted to unload 27,500 shares, that would be a dumb way to do it. Unless you wanted to drive the price down in order to accumulate shares. So you have a stock which traded over a million shares today (2X average volume) and closed up almost a dollar - but those 27,500 shares at the open were enough to drop it over a dollar. Incidentally, on the morning after the "earnings" report (did anyone expect them to make money?), I noticed RLYP crossing in the premarket down 1.69. I have a belief that almost everything that happens in the premarket is a headfake. (i.e. If there was something in the quarterlies which alarmed me, why would I throw shares into the premarket at the bid? Why wouldn't I buy a couple of thousand shares at the ask and unload my position later?) So, what was significant today? The 27,500 shares which dropped it over a buck at the open? Or the million shares which walked it up a buck (very gingerly) during the rest of the session?
I bought this all the way down to 25.04, and more than doubled my stake here. Unfortunately, I started buying @ 28. Nonetheless, I think the trading was largely phoney. I never saw the active trading which the volume numbers would imply. Often no trades would cross for several minutes. I was also suspicious of the fact that the price was driven down repeatedly by throwing in several thousand shares at the market at the open. The stock would then flatline for most of the rest of the session. As I've posted before, when a large player wants to unload a position, he does not throw sell orders in at the open; he throws in buy orders to drive the price up, then gingerly unloads shares, walking it down with little false rally plateaus along the way. So, although I often disparage the retail investor's "Big guys driving the price down to get your shares cheap" whine, I think that is exactly what's been happening here.
Well, they're both down, along with a lot of the other smaller biotechs. Prettty safe to pick on, since we all know nothing will happen for a couple of months. The stock hasn't been this low since December of 2014.
Note that the stock was stuck around 26 for more than half the day. MM's just passing shares back and forth, I think. In my experience, when a large entity wants to unload a position, they will buy at the open to spike it up, then walk it down gradually. That is the opposite of what is happening here.
If you believed that, you should have doubled up your short -- it was trading at about 12.50 when you posted Thursday.
Rather than buy this in a block AH, you might consider staging smaller orders. If they push this down tomorrow, you might get it much cheaper. There was nothing bad in the report, obviously, but a lot of the biopharmas are getting raided on earnings nonetheless. I sold half my CLDX this morning, which I will now buy back at leisure.
It seems much simpler to me. The stock basically failed to breach 120 during a time when pharmas were weakening, and now has basically settled in at 115. I feel that it will advance toward 120 again from here. This has transitioned from a growth stock to a growth/value stock. If they had a strong new entry in a third area - the HIV and HCV franchises are seen, incorrectly I believe, as limited and ultimately declining - they would move up dramatically. The expectation here that they will acquire a major player in a completely different area, such as oncology, is mistaken I believe. Their expertise is in virology, and I think they will acquire smaller companies within this area. Herpes would be a logical target.
I also more than doubled my position Friday at an average price of 28. At the same time, I also hold a smaller position in ZSPH as a kind of hedge. If, when we see the 13f's in about a week, Orbimed Advisors has maintained or increased their position, I will be reassured.
Watching the trading Friday, I noticed that as the stock was recovering, largish blocks would appear on the ask side, which served to keep the stock from advancing for brief periods. If one were liquidating a position and the stock was recovering, this would be stupid. I think the stock was being accumulated at these points.
I prefer RLYP to ZSPH because of the novel means of action - if it works for hyperalkemia (sp?), it could also work for diabetes, etc. I agree with the poster on first mover advantage. The field is open at the moment. ZSPH will not only have to pass the various regulatory hurdles, but also dislodge patiromer.
As for RLYP's weakness, I think that is characteristic for pharma stocks to weaken after the euphoria of successful trials, then strengthen as they near launch. The most dramatic advances generally come later, as the drug approaches profitability.