||Jazz Pharma, Alkermes, Qiagen|
||Prothena, Tesaro, Macrogenics|
About the fund: Founded in 1989, OrbiMed started out as a public equity fund. It expanded into long/short equity and private equity in 1993. Since then it's added Asia, Israel and Royalty funds. It now ranks among only a handful of life science investors easily able to invest in both private and public life sciences companies of all sizes. OrbiMed has about $12.5 billion under management and is the largest dedicated healthcare investor.
Samuel Isaly started the firm after he left Mehta and Isaly. Viren Mehta continued to run the biopharma advisory group, which is now known as Mehta Partners. Isaly started out as a pharma analyst with various institutions including Chase Manhattan Bank, Merrill Lynch, Legg Mason and S.G. Warburg. He has an MS in economics from The London School of Economics.
OrbiMed also manages the Worldwide Healthcare Trust (up 21% YTD), the Biotechnology Growth Trust (up 26% YTD), and other public equity funds.
"In biotech, you always play the catalysts--Puma ($PBYI), Actelion ($ATLN), InterMune ($ITMN)--where you have Phase III data. We are a hedge fund, so we can play both sides. In major clinical trials, that's a catalyst where we think we have a differentiated point of view," OrbiMed partner Sven Borho told FierceBiotech. As a long-short player, it can be on one side or the other of every big binary outcome.
But OrbiMed isn't confined to biotech; it plays all the healthcare sectors. Right now, Borho is particularly fond of specialty pharma, which is driven by M&A activity, and even medical devices. On the latter he said, "I take a contrarian point of view, everyone's waiting for it to creep up before they invest." Borho likes a handful of medical device small- to mid-cap names such as Biomet and Stryker ($SYK). He started out at OrbiMed in 1991 and was promoted to a portfolio manager in 1993.
Show me the money: OrbiMed has had sizable positions in InterMune and Puma. The former is the top biotech winner for the year, up 400% on positive Phase III data and an $8.3 billion Roche ($RHHBY) acquisition, while the latter is the top performer for this quarter, up more than 340%. At June 30, OrbiMed held about $21 million worth of Puma shares (OrbiMed was a venture investor in Puma) and $239 million in InterMune (which has gained by about two-thirds this quarter).
Borho also cites Allergan ($AGN), Shire ($SHPG), Illumina ($ILMN) and Gilead Sciences ($GILD) as major winners for the firm this year. OrbiMed also had a $391 million position at June 30 in another big winner for the year, Intercept ($ICPT), which it has since trimmed.
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