Earlier today Catalyst Pharmaceutical Partners, Inc. (NASDAQ:CPRX) has announced promising top-line results in proof-of-concept trial of its CPP-109 (Vigabatrin). CPP-109 is used to treat people with Tourette’s Disorder (TD) that were refractory to the previous treatments. Catalyst Pharmaceutical Partners, Inc. (NASDAQ:CPRX) stated that one out of four patients indicated a clear reduction in tics, whereas two other patients demonstrated 25% reduction in tics. The company’s CEO Patrick McEnanyEnany pointed out that CPP-109’s mechanism of actions validates the potential of CPP-115 for treatment of Tourette’s disorder in the future. As the news about the results broke out, the stock jumped almost 18%, but then retracted to around 4%. In addition to this, MLV & Co has initiated coverage on the stock with a ‘Buy’ rating and a price target of $14, which represents a whopping 250% premium over the closing price on Tuesday. What do hedge funds think about Catalyst Pharmaceutical? Is it a buy at the moment?
Why do we keep track of hedge fund and insider activity surrounding a stock? Because hedge fund sentiment can give us a different perspective and help us in reading the minds of experienced hedge fund managers. Closely following the hedge fund preferences and activities can help investors pick stocks that can give them better returns. On the other hand insider activity cannot be ignored, as insiders have that little bit of extra information about the stock when compared to portfolio managers or analysts.
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For Catalyst Pharmaceutical Partners, Inc. (NASDAQ:CPRX), the number of hedge funds holding long positions jumped to 12 by the end of first quarter from 11 a quarter earlier. In addition, the aggregate capital invested by these hedge funds in Catalyst also soared by 132% during the first quarter to $108.6 million, while the stock gained only 48% during the same period. This shows that many hedge funds made bullish bets on the stock during the first quarter.
In addition, let’s take a look at the insider activity in Catalyst Pharmaceutical Partners, Inc. (NASDAQ:CPRX). There were no insider sales of shares so far this year. But there were quite a few insider purchases. The CEO of Catalyst Pharmaceutical Partners, Inc. (NASDAQ:CPRX), McEnany, bought a total of 55,000 shares in January and April. Executive VP David Muth bought 24,700 shares in the last few months and Lead Independent Director Charles O’Keefe acquired 25,000 shares during the same period.
What have hedge funds been doing with Catalyst Pharmaceutical Partners, Inc. (NASDAQ:CPRX)?
According to Insider Monkey’s database, Julian Baker and Felix Baker’s Baker Bros. Advisors had the largest position in Catalyst Pharmaceutical Partners, Inc. (NASDAQ:CPRX), with 7.56 million shares worth close to $32.8 million, accounting for 0.3% of its total 13F portfolio. Following Baker Bros. Advisors is Steve Cohen’s Point72 Asset Management holding around 6.57 million shares valued at $28.4 million. Some other investors that are bullish on the company include Mitchell Blutt’s Consonance Capital Management, Kevin Kotler’s Broadfin Capital and Joseph Edelman’s Perceptive Advisors.
Some hedge fund managers were more bullish on the stock by initiating new positions during the first quarter. Leading the way is Consonance Capital Management, managed by Mitchell Blutt, who added around 4.85 million shares of Catalyst Pharmaceutical Partners worth $21 million as of the end of March. Joseph Edelman’s Perceptive Advisors also initiated a position in the stock by acquiring 1.2 million shares. Some other funds with new positions are Michael Platt and William Reeves’s BlueCrest Capital Mgmt., Israel Englander‘s Millennium Management, and Jim Simons’ Renaissance Technologies.
Hedge funds started pouring more money into Catalyst Pharmaceutical Partners, Inc. (NASDAQ:CPRX) in the first quarter, which shows that big investors are starting to like this stock. In addition, there were many insider acquisitions and no sales. The pharmaceutical company also announced promising results on its proof-of-concept trial for treating Tourette’s Disorder. We recommend to buy this stock as all the indicators show positive signs.
Disclosure: None
