Correction: This article has previously mistakenly stated that the Redmile Group had sold shares of Array Biopharma. Therefore, the title and the first paragraph of the article have been corrected.
In a recent filing with the SEC, Jeremy Green‘s Redmile Group, which has been consistently accumulating shares of Array Biopharma Inc (NASDAQ:ARRY) for the past seven quarters, revealed that it has yet again increased its stake in the company. Redmile now owns 17.25 million shares of Array Biopharma, which is a 12% increase from almost 15.4 million shares it disclosed owning on August 5 in a regulatory filing, and more than 30% increase from the over 13.2 million shares of the company it held at the end of June. Redmile’s present stake in Array Biopharma Inc is worth $101.25 million.
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Redmile Group is a San Francisco, California-based healthcare-focused hedge fund founded by Jeremy Green in 2007. Apart from investing in public companies, Redmile also has a sizable portfolio of private healthcare companies in which it has made venture capital investments. Prior to founding Redmile, Mr. Green served as a portfolio manager and managing director at Steeple Capital. As of June 30, Redmile’s U.S public equity portfolio was worth $1.22 billion and 97% of it was invested in stocks from the healthcare sector. Even though the fund had positions in 55 stocks, the top ten holdings of the fund accounted for 47.36% of its equity portfolio.
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Array Biopharma Inc (NASDAQ:ARRY) is a Boulder Colorado-based biopharmaceutical company that focuses on the development and commercialization of drugs for cancer patients. Owing to the greater than 50% gain in the shares of Array Biopharma Inc (NASDAQ:ARRY) during January, when it entered into an agreement with Novartis AG (ADR) (NYSE:NVS) to acquire worldwide rights to encorafenib, the shares are still trading up by 24.32% year-to-date even after suffering gradual declines since then. Apart from Redmile Group, which was the largest shareholder of the company at the end of June among the funds we track, several other healthcare-focused hedge funds like Samuel Isaly‘s Orbimed Advisors and James E. Flynn‘s Deerfield Management also had a substantial stake in Array Biopharma Inc. As of June 30, Orbimed Advisors held slightly above 10.0 million shares and Deerfield Management held over 9.5 million shares of the company. During the second quarter, the number of hedge funds among those covered by our database that disclosed a stake in the company remained constant at 21. However, the aggregate value of investors’ holdings in the company saw a drop of 10% during the April-June period, to $401.2 million.
On August 3, Array Biopharma reported its second quarter earnings, declaring an EPS loss of $0.09 on revenue of $12.30 million, much better than analysts’ consensus estimate of an EPS loss of $0.16 on revenue of $10.29 million. Array Biopharma announced the appointment of Patricia Henahan as its new Chief Financial Officer (CFO) on September 8. Prior to joining Array Biopharma, Ms. Henahan served as the Vice President of Finance at Hospira, Inc. (NYSE:HSP), which was recently acquired by drug behemoth Pfizer Inc. (NYSE:PFE). Although all five of the analysts and brokerage houses that cover Array Biopharma currently have a ‘Buy’ rating on it, with one of its largest shareholders diluting its stake after seven continuous quarters of additions and without the shares having run up significantly to suggest profit booking, investors who are interested in buying the stock should exercise caution.
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