Biopharmaceutical Providers Draw Interest from Investors Like Armistice Capital

Dedicated to researching and producing innovative therapies to treat a variety of conditions, the biopharmaceutical sector has experienced notable growth in recent years — particularly in the U.S.

Between 2015 and 2020, U.S. companies were responsible for more than a third — 38% — of the biotechnology patents that were filed globally, according to the Center for Strategic and International Studies.

In tandem with biopharmaceutical companies introducing novel developments, investment interest in the sector’s work has increased.

This year has been no exception. A number of institutional investors and hedge funds have increased their ownership of research-based entities such as global biopharmaceutical company Alkermes — which has crafted items to treat conditions such as alcohol and opioid dependence, schizophrenia and bipolar I disorder.

The Massachusetts-based company is also working to develop potential clinical and preclinical products to address neurological disorders.

According to financial news outlet MarketBeat, more than 95% of Alkermes’ stock is owned by institutional investors and hedge funds.

Global value-oriented and event-driven hedge fund Armistice Capital, for instance, filed a 13F-HR form disclosing ownership of 2,699,179 shares of Alkermes’ stock in August, according to Fintel, which were valued at $65,050,214 as of June 30.

Armistice Capital grew its holdings of Alkermes by more than 301% in the second quarter of this year. The hedge fund’s May 15 13F-HR filing listed its ownership as totaling 672,218 shares of the company’s stock.

Pacer Advisors Inc., another investor, boosted its holdings of Alkermes shares in the second quarter by 31.8% through the purchase of 1,362,079 shares. Pacer Advisors now holds 5,640,642 shares of the company’s stock — which MarketBeatsays is worth approximately $135,939.

In the first quarter of the year, Price T Rowe Associates Inc. MD increased its shares of the company’s stock by adding 6,730,671 shares. Price T Rowe Associates Inc. MD’s purchase left it with a total of 8,326,256 shares, a more than 421% increase.

In July, Alkermes reported $0.70 earnings per share, with a net margin of 19.15% return on equity of 23.20% and quarterly revenue of $399.13 million.

Diagnostic and Device-Centered Development

A molecular diagnostics company that’s located in Madison, Wisconsin, has been the focus of recent institutional investor and hedge fund-related investment activity.

Armistice Capital increased its holdings of Exact Sciences Corporation — whose work involves early-stage cancer detection — in the second quarter of this year, upping its shares by roughly 92% to total 1,400,086 shares with the purchase of 669,438, MarketBeat reported in early November. The publication said Armistice Capital’s shares are valued at approximately $59,154,000.

Some of the company’s other investors include William Blair Investment Management LLC, which secured a new position in Exact Sciences during the quarter with a value of roughly $163,896,000; and Champlain Investment Partners LLC, which added 1,438,010 shares to bring its total to 2,258,235 shares, an 175.3% increase.

Exact Sciences’ cancer screening and diagnostic tests include Cologuard, an at-home DNA test for colorectal cancer, and the company’s Oncoguard Liver solution, a blood test that can aid in the detection of hepatocellular carcinoma.

A number of investors have also increased their stake this year in another biopharmaceutical company, Inari Medical, which develops devices that address several health needs.

Headquartered in Irvine, California, the company’s solutions include its FlowTriever system, designed for pulmonary embolism patients; the ClotTriever mechanical thrombectomy device, for the treatment of deep vein thrombosis; its RevCore catheter, used in scenarios involving acute to chronic in-stent thrombosis; and the InThrill thrombectomy system, which was created to maximize thrombus removal and restore AV access without capital equipment.

Inari Medical was one of Armistice Capital’s biggest portfolio allocation increases in the second quarter, according to Fintel. Per Nasdaq data, the hedge fund’s holdings grew to 1,009,252 shares, a more than 353% increase from its previous share amount.

Point72 Asset Management LP also made a sizable investment in Inari Medical during the quarter, purchasing 786,691 more shares for a total of 1,481,283 — a more than 113% increase.

Vanguard Group Inc. obtained an additional 28,921 shares for a total of 5,628,775; and American Century Companies Inc. added 26.83% more shares of the medical device company’s stock. The investment management firm now owns 980,917 shares.

Inari Medical shared its third-quarter financial results and recent business developments in October — which included revenue generation that totaled $153 million, a 21% increase from the third quarter of 2023, and being accepted to present its PEERLESS study as a late-breaking clinical trial at the 2024 Transcatheter Cardiovascular Therapeutics (TCT) Annual Scientific Symposium on Oct. 29.

The medical device company’s CEO, Drew Hykes, said Inari Medical was looking forward to presenting its data at the symposium.

The randomized, controlled PEERLESS trial was initiated to compare the outcomes of patients with intermediate-risk pulmonary embolism who have been treated with Inari Medical’s FlowTriever system to catheter-directed thrombolysis treatment.

“We continue to drive strong performance across the entire Inari portfolio as we advance our leading position in large, underserved vascular markets,” Hykes said in a statement. “Our products are performing well, and looking ahead, we have several important catalysts on the horizon.”