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Andreas Halvorsen Buys Maker of First-in-Class Cancer Treatments, Calithera Biosciences

- By Holly LaFon

Andreas Halvorsen (Trades, Portfolio)'s $30 billion Viking Global hedge fund has invested in a new class of cancer drugs being developed by Calithera Biosciences Inc. (CALA), it announced on Tuesday evening, via a stake worth 7.8% of its shares.


Halvorsen purchased 1,607,936 shares of the company on Feb. 8, when its price closed at $9 per share, for a total cost of $14.5 million. For the year through the date of Halvorsen's transaction, the biotech company's stock price had bounded 177%, but it remains down about 6% since going public in October 2014.

Calithera's stock jump launched around the time that it announced a heft investment by biopharmaceutical company Incyte Corp. (INCY) to develop and commercialize its first-in-class hematology and oncology drug CB-1158. According to the agreement, Calithera will receive $45 million in an up-front payment and $8 million investment in its shares at a price of $4.65 per share. Incyte will receive worldwide rights to develop and commercialize the drug, while Calithera will have rights to research, develop and commercialize other uses of the same treatment.

The two companies also plan to co-fund development the development of CB-1158, with Incyte funding 70% of global development and Calithera 30%. If the drug sees approval and commercialization, the companies will split U.S. profits and losses, with Incyte receiving 60% and Calithera 40%.

CB-1158 is the second product candidate of Calithera, which focuses on small-molecule cancer drugs that target metabolic requirements of tumor cells and cancer-fighting immune cells, a relatively new field of cancer therapy. The U.S. Food and Drug Administration accepted an Investigational New Drug application for the first-in-class drug in July 2016, and the company treated its first patient with the drug in a trial in September 2016.

Calithera's leading product candidate, CB-893, is a first-in-class inhibitor of a tumor enzyme, glutaminase, and is in Phase 1 clinical trial stage. The drug has been shown to have clinical responses in renal cell cancer, acute myeloid leukemia, and several other types of tumors.

Halvorsen holds shares of several other cancer treatment companies, such as Kite Pharma Inc. (KITE) and Tesaro Inc. (TSRO). His biggest biotech positions are: Biogen Inc. (BIIB), Shire Plc (SHPG) and Biomarin Pharmaceutical Inc. (BMRN).

Viking approaches investing with a special focus on intensive fundamental research and a long-term viewpoint. It was founded in 1999 and has offices across several major cities such as Greenwich and New York.

See Andreas Halvorsen (Trades, Portfolio)'s portfolio here.
This article first appeared on GuruFocus.