The days of having no fund activity in Epirus Biopharmaceuticals Inc (NASDAQ:EPRS) are over. In filings with the SEC that were revealed over the last few days, both Stephen Dubois’s Camber Capital Management and Kevin Kotler’s Broadfin Capital have declared large, passive positions in the pharmaceutical company. Broadfin declared ownership of 1.50 million shares, a 6.7% stake, while Camber declared ownership of an even 2.00 million shares, an 8.9% stake.
Camber and Broadfin are small hedge funds with an emphasis on pharmaceutical companies. Camber managed an equity portfolio valued at $1.06 billion as of September 30, while Broadfin’s was valued at $954 million. Camber’s most valuable holding was a 1.75 million share stake in Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA), while they recently revealed a new position in yet another pharmaceutical company, Eagle Pharmaceuticals Inc (NASDAQ:EGRX).
Broadfin meanwhile recently has initiated a new passive position in the Israel-based pharmaceutical company Alcobra Ltd (NASDAQ:ADHD). Their most valuable holding as of September 30 was in Flamel Technologies S.A. (ADR) (NASDAQ:FLML), with their 5.01 million share stakein the French pharmaceutical company being worth $71.63 million.
The two new positions in Epirus Biopharmaceuticals Inc (NASDAQ:EPRS) the first ones known among our hedge funds since the end of the third quarter of 2014, when both D E Shaw and Jim Simons’ Renaissance Technologies revealed they had closed their positions, leaving no ownership of the stock among our funds.
While the disclosures regarding Epirus Biopharmaceuticals Inc (NASDAQ:EPRS) were revealed today and Friday respectively, they are dated back to January 30 and 31, shortly after Epirus conducted a public offering of 9.6 million shares, priced at $5.00. The net proceeds of the sale were expected to be $44.2 million after fees, and would be used on their BOW015 clinical program, as well as on the advancement of their other product candidates in development, and general corporate purposes. The offering was an expected necessity, as Epirus is expected to lose $40 million annually over the next two to three years as it develops and seeks approval for its products around the world.
Epirus Biopharmaceuticals Inc (NASDAQ:EPRS)’s BOW015 is a biosimilar version of infliximab, which is currently marketed under the name Remicade. The medication is used to treat a number of conditions including Crohn’s Disease, Ulcerative Colitis, Rheumatoid Arthrtis, and Plaque Psoriasis. Epirus revealed positive results from their Phase 3 comparative study of BOW015 to Remicade in a poster presentation on November 18 at the 2014 Annual Scientific Meeting of the American College of Rheumatology and the Association of Rheumatology Health Professionals. Patients suffering from Active Rheumatoid Arthritis enjoyed 20% improvement, indicating they could safely and efficiently be switched from the more expensive Remicade to BOW015. Remicade generated approximately $8.4 billion in global sales in 2013.
Epirus Biopharmaceuticals Inc (NASDAQ:EPRS) has two other biosimilars in development as well, BOW050 (adalimumab) and BOW070 (tocilizumab). Those products are currently marketed under the names Humira and Actemra respectively.
Epirus Biopharmaceuticals Inc (NASDAQ:EPRS) languished around the $1.00 mark for much of 2013 and the first half of 2014, until they completed their merger with Zalicus in the middle of July 2014, which included a 10:1 stock split. The results of the merger and stock split sent shares vaulting to $11.48, though they’d eventually fall under $4.00 again. On January 7 however, it jumped more than 33% following the news that the FDA had unanimously recommended approval of another biosimilar drug for sale, Sandoz’s EP2006, a biosimilar of the cancer-fighting drug Filgastrim, marketed by Amgen, Inc. (NASDAQ:AMGN) as Neupogen. The landmark ruling opened a clear path for the approval of Epirus’ own biosimilar drugs, assuming proper study results, which in the case of BOW015, they have shown.
Despite that, Epirus Biopharmaceuticals Inc (NASDAQ:EPRS) has again fallen back under $5.00, making it an attractive moderate-risk, high-reward play. The most recent analyst to comment on the stock was Leerink Swann, which initiated coverage back in October with an ‘Outperform’ rating and $12.00 price target. Given Pfizer Inc. (NYSE:PFE)’s recent purchase for $15 billion of another biosimilar maker, Hospira, Inc. (NYSE:HSP), it’s possible Epirus also becomes a takeover target, especially given its current light trading levels which have it valued at a market cap of just $113.19 million. Needless to say, any such move would likely be a coup for Epirus shareholders.
Disclosure: None
