Julian Baker and Felix Baker’s Baker Bros. Advisors continues to relentlessly add shares to its position in Seattle Genetics, Inc. (NASDAQ:SGEN). In a new filing with the SEC, the hedge fund reported ownership of just under 36.28 million shares, 26% of the outstanding shares of the issuer. The new position represents an increase of 5.41 million shares from the firm’s holding on June 30. Meanwhile, in a separate filing, the healthcare-focused fund reported a change to its position in DBV Technologies SA – ADR (NASDAQ:DBVT). While the size of the position remained unchanged at just over 3.6 million shares, a 14.9% stake in the company, the nature of the position has been changed to activist from passive.
Baker Bros. Advisors has been one of the top performing funds in our database all year. Founded by the Baker brothers, Julian and Felix (pictured) in 2000, the New York City-based healthcare fund’s picks have returned 108.3% through June 30 based on our weighted average returns formula of the fund’s long positions in companies with market caps of at least $1 billion. Its strong second quarter showing helped it top all other funds during that period, and it’s rattled off multiple major success stories this year, including the meteoric rises of Anacor Pharmaceuticals Inc (NASDAQ:ANAC), Synageva Biopharma Corp (NASDAQ:GEVA), and Pharmacyclics Inc (NASDAQ:PCYC).
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Let’s start with Seattle Genetics, Inc. (NASDAQ:SGEN), Baker Bros. second-largest position heading into the third quarter. The fund has been adding to its stake continuously throughout the past seven quarters, with the holding nearly doubling in size during that time. While its shares are up by just under 50% this year, it is up by less than 10% during that seven-quarter stretch, owing to a rough 2014.
Nonetheless, the company appears to be back on track, and its stock has been particularly strong in September, gaining about 20% so far this month, much of it in the past few days following its announcement of an 11.71 million-share offering of common stock on September 10. Seattle Genetics, Inc. (NASDAQ:SGEN) disclosed that it would use the approximately $480 million in proceeds to fund the commercialization of ADCETRIS in the United States and Canada, and to develop its other product candidates.
Baker Bros. held by far the largest position in Seattle Genetics, even before the latest addition. Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management came next as of June 30, with just 1.26 million shares.
Let’s briefly check in on DBV Technologies SA – ADR (NASDAQ:DBVT) now. There wasn’t much to go by in the recent filing as to why Baker Bros. decided to go activist on the company, as it disclosed having no current plans or proposals regarding the company’s operations, though the filing did reveal that Baker Bros. “may make suggestions to the management of the Issuer regarding corporate financing and strategy”.
The sudden shift doesn’t appear related to under-performance, as DBV Technologies SA – ADR (NASDAQ:DBVT) has also had a very strong 2015, up by more than 50%. In fact just yesterday we reported that it had carried its pre-market momentum into the regular trading session and was making a nice move upwards following Morgan Stanley (NYSE:MS) initiating coverage on the stock and assigning it an ‘Overweight’ rating and hefty $59 price target. Shares have gained another 1.59% today.
Israel Englander‘s Millennium Management held the second-largest stake in the biotech company, which is working on developing treatments for severe allergies. Millennium Management held 592,200 shares as of June 30, trailing only Baker Bros. within our database. Another healthcare fund, Jacob Gottlieb’s Visium Asset Management, held 444,400 shares.
Disclosure: None
