Baker Brothers Advisors


By the Numbers
Amount in fund at 6/30/2014:
$8.2 billion
Change from 12/31/2013:
15%
Number of positions:
107
Three largest holdings by value:
Synageva BioPharma, Incyte, Pharmacyclics
Three new positions:
Versartis, Concert Pharma, Alder Biopharma
Three closed positions:
Auxilium Pharmaceuticals, Intercept Pharmaceuticals, Chelsea Therapeutics

About the fund: Not just a movie, this pair of real-life brothers is considered fabulous within the industry. Now in their mid- to late 40s, Julian and Felix Baker founded hedge fund Baker Brothers Investments in 2000. According to the earliest available SEC filing for this fund under the same name, they had a mere $256 million at mid-2003. Prior to founding their own fund, they co-founded a biotech investment firm with the Tisch family. The fund is a long-term investor backed by major university endowments and foundations; it focuses on trading in public life science companies.

Felix has a Ph.D. from Stanford University in immunology, while Julian started out in the private equity arm of Credit Suisse First Boston. The pair are both on the board of Genomic Health, Julian since 2001 and Felix since 2012. In 2001, Baker Brothers participated in a $29 million Series B round for Genomic Health alongside Kleiner Perkins Caufield & Byers and Versant Ventures. Felix is also on the board of ag bio company Synageva, where he has been a director since 2000. Julian is also on the board of Incyte ($INCY).

Show me the money: The Baker Brothers have a huge portfolio, devoted primarily to biotech. One of their biggest recent winners was InterMune ($ITMN). This once-downtrodden company has offered the largest return among public healthcare companies so far this year--400%. That's more than any other company in healthcare with a market cap of more than $300 million. At June 30, Baker Brothers held 4.72 million shares of InterMune worth $208.5 million. InterMune was boosted earlier this year by positive Phase III data and again in August by Roche's $8.3 billion acquisition announcement. Assuming the firm didn't sell any shares ahead of the August acquisition announcement, that's now worth almost $350 million.

It also had much smaller stakes at June 30 in at least 5 companies whose share price has more than doubled this year: orphan disease company Amicus Therapeutics ($FOLD), HCV player Achillion ($ACHN), specialty pharma BioDelivery ($BDSI), oncology and autoimmune company TG Therapeutics and 2014 IPO company Receptos ($RCPT), which is focused on immune diseases.

For more:
J&J, Pfizer chip in on $18M round for anti-inflammatory biotech's PhII
Venture backers inject $25M into Synageva's rare disease platform
Pfizer venture arm joins $25M round for Aquinox

Baker Brothers Advisors
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