Biotech-Focused VHCP Management’s Bullish Moves and New Picks

Axovant Sciences Ltd (NYSE:AXON)

 – Number of shares owned by VHCP (as of March 31): 184,110

 – Value of VHCP’s holding (as of March 31): $2.11 Million

VHCP Management initiated a position in Axovant Sciences Ltd (NYSE:AXON) during the first quarter of 2016, which comprised 184,110 shares at the end of March. The newly-acquired stake was worth $2.11 million at the end of the quarter. Axovant Sciences is a clinical-stage biopharmaceutical company that develops novel therapeutics for the treatment of dementia. The company is currently focused on developing its lead product candidate RVT-101 for the treatment of Alzheimer’s disease and dementia with Lewy bodies, or DLB. In late April, the U.S. Food and Drug Administration approved ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD)’s Nuplazid tablets, the first approved drug for the treatment of hallucinations and delusions associated with psychosis experienced by some people suffering Parkinson’s disease. While ACADIA’s Nuplazid is designed to treat Parkinson’s disease psychosis, Axovant is focusing on a separate form of dementia called DLB that affects 1.4 million Americans. Shares of Axovant are down by 37% year-to-date. Jacob Gottlieb’s Visium Asset Management reported ownership of 4.2 million shares of Axovant Sciences Ltd (NYSE:AXON) during the latest 13F filing period.

Ocera Therapeutics Inc. (NASDAQ:OCRX)

 – Number of shares owned by VHCP (as of March 31): 796,550

 – Value of VHCP’s holding (as of March 31): $2.34 Million

VHCP upped its stake in Ocera Therapeutics Inc. (NASDAQ:OCRX) by 92,820 shares during the first three months of the year, ending the March quarter with 796,550 Ocera shares. The shares of the clinical-stage biopharmaceutical company focused on acute and chronic orphan liver diseases have dropped by 18% since the start of 2016. The company’s main possible pillar of growth is represented by its clinical candidate OCR-002 for the treatment of hepatic encephalopathy (HE), which is a serious complication of liver cirrhosis or liver failure. Ocera Therapeutics is currently conducting a randomized, placebo-controlled Phase 2b clinical trial to evaluate the efficacy and safety of OCR-002 in reducing the severity of HE symptoms. There were ten smart money investors tracked by Insider Monkey with stakes in the biopharmaceutical company at the end of March. Israel Englander’s Millennium Management owns 531,131 shares of Ocera Therapeutics Inc. (NASDAQ:OCRX) as of March 31.

Zafgen Inc. (NASDAQ:ZFGN)

 – Number of shares owned by VHCP (as of March 31): 602,114

 – Value of VHCP’s holding (as of March 31): $4.02 Million

In the first quarter of 2016, VHCP Management also increased its exposure to Zafgen Inc. (NASDAQ:ZFGN), by 60,634 shares. The increased position was worth $4.02 million at the end of the first quarter and represented 3.5% of VHCP’s portfolio. The shares of the biopharmaceutical company, which is focused on improving the health of patients suffering with obesity and other complex metabolic disorders are 7% in the green year-to-date. Earlier this year, hedge fund Kerrisdale Capital voiced bearish views on the company, asserting that the FDA is not likely to approve its obesity drug beloranib. While the hedge fund believes the drug has a positive impact on the reduction of body weight, Kerrisdale believes that is outweighed by the fact that the drug has been shown to increase the risk of death four-fold. In late 2015, the FDA put a full clinical hold on the company’s Investigational New Drug Application for beloranib after two patients died while being evaluated in a clinical trial of the drug. James E. Flynn’s Deerfield Management was the owner of 3.06 million shares of Zafgen Inc. (NASDAQ:ZFGN) at the end of March.

Disclosure: None