Investors like Armistice Capital Help Support Biotech and Other Endeavors
While investment in biotech research — which involves medical treatments being created through the manipulation of biological processes and living organisms at a molecular level — dropped off after a frenzy of COVID-19 pandemic-era activity, the sector has recently seemed to pick up some speed.
More than 44% of healthcare industry professionals say they feel optimistic or very optimistic about biotech funding recovering this year, according to a GlobalData survey; and in the first quarter of 2024, biotech and pharmaceutical organizations raised $5.9 billion in financing, according to data
from market research provider Pitchbook and the National Venture Capital Association.
Seven biopharma companies also went public in the first two months of the year — compared to a total of 12 during all of 2023, per a report from global law firm Ropes & Gray.
A number of industry members have suggested biotech work is poised to grow. Market analysis resource Precedence Research, for instance, projects the biotech sector will be worth $1.75 trillion by 2025 — and continue to escalate through 2033, eventually reaching $4.25 trillion.
Sizable Companies Are Garnering Interest
Some of the biotech deals that have taken place thus far this year include investors such as global value-oriented and event-driven hedge fund Armistice Capital and Marshall Wace LLP, a London-based hedge fund, obtaining shares of late-stage biopharmaceutical company Cytokinetics Incorporated’s stock.
Cytokinetics’ muscle biology-related research centers on creating treatments for debilitating diseases in which cardiac muscle performance is compromised.
Its current pipeline of medicines[EB1] includes Omecamtiv Mecarbil, a selective small molecule cardiac myosin activator that targets the pumping function of the heart and was the subject of a Phase 3 clinical trial involving more than 8,000 patients with heart failure.
Cytokinetics has also designed an oral cardiac myosin inhibitor called Aficamten to reduce the hypercontractility associated with hypertrophic cardiomyopathy, also known as HCM disease. In preclinical trials, Aficamten reduced thickening and stiffening of the heart.
According to Cytokinetics, the company has conducted some of the largest clinical trials relating to amyotrophic lateral sclerosis (ALS), formerly known as Lou Gehrig’s disease, which affects motor neurons and nerve cells in the brain, according to the National Institute of Neurological Disorders and Stroke, as well as spinal cord nerve cells that control voluntary muscle movement and breathing.
In Fintel’s coverage of Armistice Capital’s latest holdings, Cytokinetics was identified as one of the hedge fund’s most significant portfolio allocation increases in the recent business quarter.
Armistice Capital has also added shares of other entities this year — such as the Coca Cola Company. Armistice purchased 752,662 shares of the beverage corporation, which has a 71.82% institutional ownership.
Coca-Cola’s results from the second quarter of 2024 showed its net revenues rose 3%, and its operating income increased 10%. Thanks in part to benefits such as a global business model that lets the company tailor its distribution efforts to align with regional preferences, Coca-Cola’s stock hit a record high point in July after its second-quarter earnings were released, according to The Motley Fool.
Like Vanguard Group Inc., Acadian Asset Management LLC and other investors, Armistice Capital has also purchased additional shares of the Incyte Corporation — which is one of Armistice’s top overall holdings, according to MarketBeat.
The global biopharmaceutical company, headquartered in Wilmington, Delaware with operations in North America, Europe and Asia, has a market capitalizion of more than $11 billion, according to Yahoo Finance.
With a focus on identifying solutions for patients with unmet medical needs via proprietary therapeutics, Incyte’s portfolio of in-development medications includes oncology and inflammation, dermatology and autoimmunity-related products.
The 13F-HR form Armistice Capital filed with the Securities and Exchange Commission in May indicated the fund owns 2,187,181 shares of Incyte stock — an 827% increase from the 236,000 shares mentioned in the 13F form Armistice previously filed on February 13. The hedge fund’s Incyte holdings were valued at $124,603,702 as of March 31, 2024, according to Fintel[EB2] .
Maintaining A Balanced Portfolio
Armistice Capital, in addition to increasing its stake in certain companies, has also reduced some of its holdings in recent months.
Although, in the past two years, the hedge fund — in tandem with Los Angeles Capital Management LLC, Allspring Global Investments Holdings LLC, Renaissance Technologies LLC, Vestal Point Capital LP, Assenagon Asset Management S.A. and Two Sigma Investments LP — reportedly purchased the highest volume of shares of Neurocrine Biosciences, according to MarketBeat, Armistice has since shed 2,315, Nasdaq reports. The fund still owns 1,023,739 shares of the biopharmaceutical company.
Los Angeles Capital Management, too, and Assenagon Asset Management have reduced their Neurocrine Biosciences holdings, according to Fintel. Los Angeles Capital Management’s shares have shrunk by 77%, and Assenagon now has 26.15% fewer shares.
Approximately 93%[EB3] of Neurocrine Biosciences’ stock is currently held by institutional investors. The more than $14 billion company, founded in 1992, researches and develops pharmaceuticals to treat neurological, neuroendocrine, and neuropsychiatric conditions.