Friday turned out to be a big day for Tiger Cub Andreas Halvorsen’s Viking Global Investors, with two IPOs in which the hedge fund held large stakes rocketing on their first day of trading.
Meanwhile, another biopharma in which it holds a smaller position has more than doubled in price since it went public a little more than a week ago. These moves should sharply boost the returns of Viking Global Opportunities fund, the firm’s hybrid offering, which typically makes the substantial investments in private companies.
Through November — before these IPOs — that fund had gained 27.3 percent for the year, according to an investor in the fund.
Shares in one of the companies that debuted on Friday, AbCellera Biologics, more than tripled from their $20 IPO price when they opened at $61 apiece. Shares of the artificial intelligence-powered drug discovery platform closed at $58.90, for a first-day gain of 194.5 percent.
The company announced on November 9 that the therapy it developed with Lilly received emergency-use authorization from the FDA to treat mild to moderate Covid-19 cases in adults, as well as pediatric patients aged 12 and older who have tested positive for Covid-19 and are at high risk of being hospitalized or progressing to severe symptoms of the disease.
As Institutional Investor earlier reported, Viking Global Opportunities owned 18.7 shares, or 8 percent of the total shares before the offering, according to the prospectus. It was expected to own more than 19.1 million shares, or 7.2 percent of the total, after the offering, according to the revised filing.
As a result, Viking’s stake was worth more than $1 billion as of Friday’s close.
Another hedge fund that benefited in a big way from the IPO was Falcon Edge Capital. As II earlier reported, the hedge fund firm’s stake was not cited in the filing, but it disclosed in its third-quarter letter that it holds a convertible note that converts at a 15 percent discount to the IPO price.
Also on Friday, 4D Molecular Therapeutics priced its IPO at an upsized price of $23 per share. The stock opened at $40 and rose as high as $45 before closing at $40.50 per share, up 76 percent. It is a clinical-stage gene therapy company.
Viking held more than 2.8 million shares, which worked out to 11.9 percent of the total after the offering, making it the largest shareholder, according to the prospectus. At the first day closing price, Viking’s stake was valued at $113 million.
Other investors included Perceptive Advisors, a biotech investment firm best known for its hedge funds.
Meanwhile, on December 3 Kinnate Biopharma priced its IPO at $20, up from its originally proposed range of $18 to $19. It is a biopharmaceutical company focused on the discovery and development of small molecule kinase inhibitors for certain cancers. It is not known how many shares Viking owns, since it was not singled out in the prospectus as a 5 percent owner. However, the filing did disclose the firm was one of a dozen or so investors.
The stock closed Friday $41, more than double its IPO price.
RA Capital Management stood to own 7.21 percent of the shares after the offering. Other firms that had previously invested in Kinnate include Surveyor Capital, a Citadel company.
