Perceptive Advisors


By the Numbers
Amount in fund at 6/30/2014:
$1 billion
Change from 12/31/2013:
22%
Number of positions:
118
Three largest holdings:
Sarepta Therapeutics, Neurocrine Biosciences, AcelRx Pharmaceuticals
Three new positions:
Zimmer Holdings, Aetna, Acceleron Pharma
Three closed positions:
Exact Sciences, Endocyte, Chelsea Therapeutics

About the fund: The success of Perceptive Advisors has not gone unnoticed. It's been profiled by both Bloomberg and Barron's in the last year looking to find the secret sauce to the hedge fund's recent strong performance. The life sciences hedge fund gained 48% last year by investing mostly in small- and mid-cap biotechs.

Fund manager Joseph Edelman has attained near-cult status for his stock-picking success. Edelman has an M.B.A. from New York University and started out as a biotech analyst. His late father was chair of the biochemistry department at Columbia University and sold a biotech company to British biotech Celltech Group, according to Barron's.

Joseph Edelman

Edelman launched the fund in 1999 with just $6 million and has since achieved an average annual return of about 30%. He reportedly keeps his staff small: just 6 analysts focused on managing this fund that has mushroomed to more than $1 billion in just 15 short years.

It will obviously get tougher for this lean team to keep returns up on such a big cash stockpile if it keeps purchasing small-cap biotechs.

"Although our assets have grown substantially, to over $1 billion, we're still able to adequately size our positions, such as MorphoSys," Edelman told Bloomberg. "It's always easier with less money. Most of my net worth is in the fund, so I'm very motivated to not manage more than I can handle."

In August, its position in German antibody company MorphoSys grew to more than 5% of the company, which is worth more than $2.5 billion. That makes this position alone worth $125 million and the largest position in the portfolio, Edelman told Bloomberg in August. (As a foreign company not listed in the U.S., MorphoSys isn't reported in the SEC filings and so is not in the data above.)

Show me the money: Another major position at June 30 was in Amicus Therapeutics ($FOLD)--the 16% of the company it had was worth $41.2 million. That stock has doubled in value since then on positive Phase III data and is up about 175% on the year. If Perceptive has simply maintained its stake, it will have doubled in value to more than $80 million.

Perceptive also had sizable positions in InterMune ($ITMN) and PTC Therapeutics ($PTCT) at June 30, worth $9.3 million and $17.6 million respectively. InterMune is up 400% on the year and about two-thirds this quarter. PTC has gained more than 125% this year and is up more than 50% this quarter.

For more:
Virobay tees up a $50M IPO to get a trio of candidates into Phase II
Grabbing a quick $55M venture round, Bellicum Pharma ponders an IPO
Otonomy heads to the FDA after its ear treatment clears Phase III

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