Julian Baker and Felix Baker’s Baker Bros. Advisors recently disclosed an increase of around 929,700 shares to its position in Mirati Therapeutics, Inc. (NASDAQ:MRTX). According to the 13D Form filed with the U.S. Securities and Exchange Commission, the hedge fund now owns approximately 3.3 million common shares, representing 19.9% of the company’s outstanding stock. Since Mirati Therapeutics went public in July of 2013, the investment firm has held a stake in the biopharmaceutical company, disclosing a position of 1.9 million shares as of the end of that year’s third quarter.
Baker Bros. Advisors is a New York City-based hedge fund that was founded in 2000 by Julian Baker and Felix Baker. The firm invests almost exclusively in the health care sector, with more than 99% of its equity holdings stemming from this industry. As of its latest 13F filing, the fund’s equity portfolio had a market value of $7.9 billion. Its largest position at the end of the third quarter of 2014 was Pharmacyclics, Inc. (NASDAQ:PCYC), accounting for more than 14% of Baker Bros. Advisors’ equity portfolio. Seattle Genetics, Inc. (NASDAQ:SGEN) was also among the fund’s top 3 picks during this time. The investment firm had increased its activist stake in the company in December of 2013 considerably, becoming the company’s largest institutional investor. Finally, Baker Bros is also bullish on Synageva Biopharma Corp (NASDAQ:GEVA), which became its third largest position in mid-2014, after the conversion of Non-Qualified Stock Options held by the hedge fund since 2005.
Although Mirati Therapeutics, Inc. (NASDAQ:MRTX) is not one of Baker Bros. Advisors’ most important positions, the New York City-based firm is the biopharmaceutical company’s largest institutional investor. In addition to Baker Bros, Mirati Therapeutics is also backed by Samuel Isaly’s Orbimed Advisors, which holds a stake of 1.16 million shares. Daniel Gold’s QVT Financial is also backing the company, revealing a significant holding in its last 13F filing, which amounted to 507,100 shares of Mirati’s common stock. Finally, Kevin C. Tang’s Tang Capital Management increased its stake in the company not too long ago and disclosed that it now holds a position of 603,900 shares.
Baker Bros. Advisors increased its stake in Mirati Therapeutics, Inc. (NASDAQ:MRTX) on January 28th, after the company announced its intention to sell shares of its common stock in an underwritten public offering that will close this week. The pharmaceutical company will offer 2,250,000 shares of its common stock at a price of $20.00 per share, thus generating gross proceeds of $45 million.
The public offering not only allowed Baker Bros. Advisors to increase its 13D holding in the equity, but also to execute a new insider purchase of stock. Following the purchase of 425,000 shares at $20.00 per share as part of Mirati Therapeutics’ underwritten public offering, the hedge fund holds 2.8 million shares. However, the investment firm is also deemed to beneficially own around 313,700 warrants to acquire shares of common stock at $6.74 until April 2016, as well as holding 280,200 warrants for the purchase of shares at $7.86, which expire in November of 2017. This brings its total holdings to 3.3 million shares of common stock.
Baker Bros. Advisors has been betting on the biopharmaceutical company since its initial public offering in July of 2013 and it has not been disappointed. Since the stock first began trading on the NASDAQ, share prices gained a whopping 134%. Throughout 2014, the equity saw a great deal of fluctuation, yet achieved an overall good performance and gained around 10%. Furthermore, according to its latest financial results, Mirati Therapeutics posted a diluted loss of $0.72 per share during the third quarter of 2014. This is positive news, considering the company registered a net loss of around $2.95 per share during the same quarter the year before. In addition, the analysts consensus earnings estimate for this quarter is $1.00 per share.
Clearly Baker Bros. Advisors’ latest increase in its holding of Mirati Therapeutics, Inc. (NASDAQ:MRTX) was not uncalled for. Not only has the stock performed well, but the biopharmaceutical company – which develops novel targeted therapeutics to be used in the treatment of cancer – seems to have a bright future. This has earned the company a “strong buy” consensus broker rating from the analysts at Zacks, who estimate the stock will hit $30.40 in a 12-month period.
Disclosure: none.
