James E. Flynn’s Deerfield Management recently increased its stake in Auspex Pharmaceuticals Inc (NASDAQ:ASPX) by 1.5 million shares at $56.5 per share. According to the Form 4 filed with the U.S. Securities and Exchange Commission, the investment firm purchased these shares on the open market in several transactions and now owns a total of 4.4 million Common Shares.
Deerfield Management is a New York City-based hedge fund that was launched in 1994 and has been managed by James E. Flynn since 2000. The firm invests primarily in equities from the health care sector, displaying extensive knowledge and a comprehensive understanding of the factors at play in this industry. Furthermore, the fund has specialized in corporate transitions, managing hostile takeovers, funding research and development, as well as in providing financial advisory services. Deerfield Management currently has $4.4 billion in assets under management and boasts an equity portfolio valued at $2.7 billion.
According to its last 13F filing, the hedge fund’s largest holding was in Auxilium Pharmaceuticals, Inc. (NASDAQ:AUXL) stock and represented 6.8% of its equity portfolio. The investment firm’s other top picks included Allergan, Inc. (NYSE:AGN) and NxStage Medical, Inc. (NASDAQ:NXTM), although each of these position only accounted for around 3% of Deerfield Management’s total holdings. Furthermore, the hedge fund disclosed a significant increase to its stake in Vanda Pharmaceuticals Inc (NASDAQ:VNDA) at the end of 2014. Following this recent transaction, the firm became one of the company’s largest institutional investors.
Deerfield Management disclosed the acquisition of its initial stake in Auspex Pharmaceuticals Inc (NASDAQ:ASPX) at the end of the first quarter of 2014. From the end of the third quarter to the hedge fund’s latest purchase of shares, the stock had gained a whopping 95%, growing by 278% since the company first went public in February of last year. Furthermore, the pharmaceutical company recently announced the underwritten public offering of an additional 4 million shares of common stock. This allowed Deerfield Management to increase its exposure to Auspex considerably, thus becoming its largest institutional investor.
Auspex Pharmaceuticals Inc (NASDAQ:ASPX) was the second-best IPO of 2014, gaining 218% throughout the past year, after the stock opened for trade at $12 per share. Deerfield Management initially disclosed owning 1.29 million Class E Preferred Shares of Auspex after the stock went public, acquiring an additional stake of 700,000 shares of Common Stock a week later. Whether share prices will continue to climb over the next quarter as they did in 2014 is uncertain, yet the hedge fund managed by Mr. Flynn seems to feel optimistic regarding the stock’s future performance.
Auspex Pharmaceuticals is a $1.65 billion market cap biopharmaceutical company, which specializes in the development and commercialization of unprecedented medicines designed for the treatment of orphan diseases. A few weeks ago, one of the firm’s latest developments – a compound used in the treatment of children with Tourette syndrome – was approved by the U.S. Food and Drug Administration (FDA). In addition to this positive announcement, the company revealed it has been developing a new drug, which could potentially find widespread use in the treatment of Parkinson’s disease and other movement related disorders. Thanks to its latest stock offering, Auspex has acquired the necessary funds to expand its research and development even further.
According to the quarterly results presented in November, Auspex Pharmaceuticals (NASDAQ:ASPX)’s stock delivered losses amounting to $0.73 per share, thus missing the consensus estimate of by $0.45 per share. For the next quarter, analysts’ average consensus estimate sets losses at $0.55 per share. Furthermore, the company is projected to report losses of $2.52 per share during the fourth quarter of 2015, according to the consensus estimate. Nevertheless, the stock is projected to grow around 28% during this quarter and could exceed expectations if their latest developments achieve the desired results. Overall, Deerfield Management seems to consider Auspex as a long-term investment, displaying a very bullish stance towards the company.
