A fledgling biopharma stock jumped 178 percent on Monday. Unfortunately, most major life sciences hedge funds missed out.
These investors, generally headed by managers with prestigious science backgrounds, spend their days obsessively searching for clinical-stage companies developing the next blockbuster drug or treatment. Hedge funds often invest in such companies when they are starting up, or during the IPOs.
So when shares of Kodiak Sciences nearly tripled Monday, it was not surprising to see many hedge funds among its major investors, with big positions in their respective portfolios. But it turns out that none of the largest, best-known hedge funds held a major position. Very few held even a small position.
Kodiak is a retina-focused biotech company researching transformative therapeutics. On Monday, it announced positive Phase 3 DAYBREAK results for key treatments in development: Zenkuda and tabirafusp-ted, both for patients with wet age-related macular degeneration.
“The strength of these DAYBREAK data positions us for the next stage of Kodiak’s evolution, as we prepare for the planned commercialization of Zenkuda as a potential best-in-class therapy for patients with wet AMD, diabetic retinopathy, and retinal vein occlusion,” said Victor Perlroth, chief executive officer of Kodiak Sciences, in a press release. He added in the statement that the results for tabirafusp-ted are also “highly encouraging” and the company will continue with testing in its phase 3 trials.
In the release, Charles Wykoff, research director at Retina Consultants of Texas and deputy ophthalmology chair at Houston Methodist Hospital, said, “The Zenkuda results exceeded my expectations, delivering the clinical profile retina specialists are seeking… "
By far the largest investor in Kodiak at the end of June was Baker Brothers Advisors, with nearly 20 million shares, making it the hedge fund’s eighth-largest long position. The life sciences–focused firm manages about $20 billion. Braidwell, co-founded in 2021 by Alex Karnal, a former managing director at Deerfield Management, and Brian Kreiter, former COO of Bridgewater Associates, also counts the stock as its eighth-largest long.
Sirenia Capital is the fourth-biggest investor. It was founded late last year by Alex Silverstein, who spent more than a decade at Steve Cohen’s Point72 Asset Management. (Point72 was an initial investor — the firm’s largest investment ever to a former employee, according to a Bloomberg report.)
Other hedge fund investors include Boxer Capital Management. RTW Investments, a prominent biopharma player, owns nearly 1.5 million shares, but the stock is only its 43rd-largest long.
Several prominent firms own tiny stakes, including Adage Capital Management, Two Sigma Investments, D.E. Shaw, and Renaissance Technologies.
