Jeremy Green’s Redmile Group has just acquired more shares of Array BioPharma Inc. (NASDAQ:ARRY). In a Form 4 filed with the U.S. Securities and Exchange Commission, Redmile Group disclosed purchases on August 11 and August 12 of a total of 532,500 shares of the biopharmaceutical company, at an average price of about $5.90 per share. Following these transactions, the San Francisco-based hedge fund owns 16.41 million shares, representing 11.75% of the company’s outstanding common stock.
Redmile Group is a San-Francisco-based hedge fund founded by Jeremy Green in April 2007. The investment firm primarily invests in healthcare and medical technology companies by pursuing both turnaround and special situations investment opportunities. Green, the founder and portfolio manager at Redmile Group, had served as a managing director and portfolio manager at Steeple Capital prior to launching his own firm. Redmile Group listed holdings worth $1.11 billion in its March 31 13F filing with the SEC, with the healthcare sector accounting for 95% of the fund’s public equity portfolio value.
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Array BioPharma Inc. (NASDAQ:ARRY) is a biopharmaceutical company that currently focuses on the development of targeted small molecule drugs to treat patients afflicted with cancer. The company is currently running six registration studies on three cancer drugs: binimetinib (MEK162), encorafenib (LGX818) and selumetinib. The shares of BioPharma have gained slightly more than 20% year-to-date, but the stock has been on a downtrend since late-June. In the following article we’ll be discussing the main factors that might have influenced the performance of the stock throughout the current year.
Array BioPharma acquired the rights to two cancer drug prospects from Novartis AG (NYSE:NVS) and GlaxoSmithKline plc (NYSE:GSK) earlier this year. Novartis agreed to sell global rights to the experimental BRAF inhibitor encorafenib to Array BioPharma, and also agreed to return the rights of the cancer drug binimetinib (MEK162) to its owner and licenser, which is yet again Array BioPharma, after acquiring GlaxoSmithKline’s high-margin oncology unit last year. Having said that, the aforementioned two Phase 3 cancer drugs stand behind the surge in the company’s stock price at the beginning of the current year. In the meantime, the management of Array has asserted that the two innovative oncology products are on track for regulatory submission in 2016. To be more detailed, Array anticipates presenting additional preliminary data on binimetinib and encorafenib in BRAF melanoma patients at the 2015 European Cancer Congress (ECC) in September. Therefore, if the results from the Phase 3 trials are positive, the company could unlock a flourishing revenue stream as late as next year.
Let’s now discuss the company’s selumetinib, which is an MEK inhibitor licensed to AstraZaneca PLC (NYSE:AZN). This product continues to progress through Phase 3 trials as a therapy for different variations of cancer, but AstraZaneca has recently announced that a Phase 3 study of selumetinib in combination with decarbazine for the treatment of patients with metastatic unveal melanoma did not meet its primary endpoint of progression-free survival. This announcement has put some downward pressure on the share price of Array. Although there is still significant risk associated with a potential investment in the biopharmaceutical company, the clinical stage cancer pipeline is very intriguing and attractive.
Array BioPharma has recently reported its financial results for the fiscal fourth quarter and full fiscal year 2015 that ended June 30, 2015. Due to the fact that Array BioPharma is a clinical-stage biotechnology company, it does not generate any sales from any commercialized products yet. However, the company’s revenue originates from collaboration deals with other drugmakers. Hence, Array posted revenue of $51.9 million for the fiscal year of 2015, compared to $42.1 million reported a year ago. In the meantime, the company reported net income of $9.4 million or $0.07 per diluted share in 2015, compared to a net loss of $85.3 million or $0.69 per share reported in fiscal 2014. Donald Chiboucis’ Columbus Circle Investors is among the hedge funds bullish on Array BioPharma Inc. (NASDAQ:ARRY) within our database, holding an ownership stake of 931,389 shares as of June 30.
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