Jim Tananbaum’s Foresite Capital has filed its latest 13F with the Securities and Exchange Commission for the reporting period of March 31, disclosing the long positions held in its equity portfolio, which amounted to a mere four holdings. The San Francisco-based fund, founded by Tananbaum in 2011, invests in both public and private healthcare companies with late-stage products, providing them with valuable venture capital and industry expertise as they seek to have novel treatments approved for use and marketed and sold to the public.
While Foresite Capital has approximately $650 million in total assets under management, the value of its equity portfolio took a sharp drop to just $21.74 million from $67.90 million at the end of 2014, as the fund sold off its positions in Karyopharm Therapeutics Inc (NASDAQ:KPTI) and Xencor Inc (NASDAQ:XNCR), previously its top two positions, which had accounted for nearly 70% of its equity portfolio. We’ll now take a look at the fund’s four remaining positions, beginning with its top holding, Orexigen Therapeutics, Inc. (NASDAQ:OREX).
Foresite’s position in Orexigen Therapeutics, Inc. (NASDAQ:OREX) was trimmed slightly, by less than 1% to 1.23 million shares valued at $9.63 million. Following the changes to its equity portfolio, Orexigen now accounts for over 44% of its portfolio’s total value, up from just 11%. Orexigen Therapeutics, Inc. (NASDAQ:OREX) has been a big underperformer throughout its lifetime, down by more than 52% since it went public in the middle of 2007. Orexigen, which sells the obesity treatment Contrave, has struggled to find profitability over the years as it suffers from low profit margins and a high debt load. Shares are up 6% this year, though they were up nearly 40% at one point in early March after a brief spike. David Lamond’s Lamond Capital Partners liked Orexigen at its reduced fourth quarter price, opening a new position of 1.89 million shares during the quarter. Orexigen hit a two-year low in early October and has rebounded to gain 87% since then.
BioDelivery Sciences International Inc. (NASDAQ:BDSI) ranks second in Foresite’s portfolio and also stands as one of Julian Robertson’s top long-term stock picks. Foresite’s position was decreased by 26% down to 494,468 shares with a value of $5.19 million. BioDelivery Sciences International Inc. (NASDAQ:BDSI) was enjoying a strong run through early 2015, up by 27% at one point in early March before disappointing results from a Phase 3 trial for its Clonidine topical gel were released. The treatment, a pain reliever for those suffering from diabetic neuropathy, failed to outperform a placebo for pain relief, which was a surprise and disappointment given the previously strong trial results. BioDelivery Sciences International Inc. (NASDAQ:BDSI) is not giving up on the treatment however, and has two other treatments, Bunavail and Belbuca, the latter of which has been approved by the FDA for the treatment of opioid addiction.
Acceleron Pharma Inc (NASDAQ:XLRN), a company developing treatments for cellular growth and repair, lands in the third position in Foresite Capital’s portfolio. The position was increased by 68% during the first quarter to 93,781 shares with a value of $3.57 million. Acceleron Pharma Inc (NASDAQ:XLRN) released its first quarter results today with the company losing $0.45 per share on limited revenue. It does however have a strong cash flow base of over $175 million to work from, which it predicts will carry its operations through mid-2017. Acceleron Pharma Inc (NASDAQ:XLRN) has plans to initiate phase 3 trials for its treatment luspatercept by the end of the year. Adage Capital Management holds the largest stake in Acceleron out of the funds in our database.
Foresite Capital’s final holding is Ignyta Inc (NASDAQ:RXDX), a biopharmaceutical company developing various targeted cancer treatments. Foresite’s position was lowered by 32% during the first quarter, leaving it with a $3.35 million holding made up of 336,766 shares. Ignyta Inc (NASDAQ:RXDX) shares spiked more than 30% in early March after it acquired the rights to four oncology development programs from Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA), and are up by 36% year-to-date. Kevin Kotler’s Broadfin Capital reported raising its stake in Ignyta shortly afterwards, to 1.52 million shares.
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