Joseph Edelman’s Perceptive Advisors is off to a strong start this year, easily surpassing its main hedge fund’s high water mark.
The $4.2 billion firm’s Perceptive Life Sciences Offshore Fund was up by more than 15 percent in the first quarter, according to HSBC. Through the first week of April it was up nearly 19 percent.
Last year, it lost about 8.3 percent after rising by more than 40 percent in three of the five previous years.
The firm declined to comment for this story.
The hedge fund specializes in biotechnology, pharmaceutical, medical device, diagnostics, and health services companies. The portfolio generally includes dozens of names, although the hedge fund firm’s top-ten holdings typically account for more than half of its assets, with Perceptive’s performance driven by five or six stocks — usually shares in emerging biotechnology companies that are making little or no money.
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The hedge fund firm also runs a private credit strategy. In early November, the firm announced that its Perceptive Credit Opportunities Fund II had reached its fundraising hard cap, with $675 million in commitments from foundations, endowments, family offices, financial institutions, and pension funds.
Then in December, Perceptive disclosed that it had raised $200 million for the Perceptive Xontogeny Venture Fund and a related vehicle, Perceptive Xontogeny Venture SLP., which will focus on investing in life sciences companies at the earliest stage. This represents a third strategy for the firm.
At year-end, the firm’s largest public position was Neurocrine Biosciences, a stock it first bought in the second quarter of 2010, according to a regulatory filing. The company develops drugs for the treatment of neurological and endocrine-related diseases and disorders.
The stock, which accounted for nearly 12 percent of Perceptive’s hedge fund assets at the end of the fourth quarter of 2018, has been the firm’s largest U.S. public long since the third quarter of 2017.
No wonder. The stock surged more than 23 percent in the first quarter alone. It has also swelled nearly 33 times since the beginning of the second quarter of 2010.
Three other sizable positions also fared well in the first quarter.
Ascendis Pharma, Perceptive’s tenth largest long bet, surged by neary 88 percent in the first quarter after the biopharmaceutical company, which targets unmet medical needs, reported positive results for a phase-3 trial for its daily growth hormone in children with pediatric growth hormone deficiency.
Meanwhile Amicus Therapeutics, Perceptive’s third largest long, jumped almost 42 percent in the first quarter. The company specializes in developing advanced therapies to treat rare and orphan diseases. In late December, it announced a key development in the clinical testing of a potential new drug.
Finally Global Blood Therapeutics, Perceptive’s second largest long, rose about 29 percent in the first quarter.
Perceptive has also been active in the private market in recent weeks, making at least five new investments, though it is not clear which investment vehicle made these investments. Private investments currently account for less than 10 percent of the hedge fund’s total assets.
On Monday, for example, clinical-stage biopharmaceutical company Poseida Therapeutics said in a press release that Perceptive was among the investors who participated in its recently closed series C financing round, which raised a total of $142 million.
Last week, women’s health care start-up Kindbody said in a press release that Perceptive co-led its $15 million series A financing.
On April 1, Fusion Pharmaceuticals, a clinical-stage biopharmaceutical company, said Perceptive participated in its $105 million series B financing.
