Another one of the funds we track here at Insider Monkey has made a big move into Tekmira Pharmaceuticals Corporation (NASDAQ:TKMR), as it was revealed in a filing that Richard Gerson and Navroz D. Udwadia’s Falcon Edge Capital has disclosed a 9.9% stake in the biotech company, reporting ownership of 2.22 million shares.
Falcon Edge Capital utilizes a long/short equity strategy, and invests in markets around the globe, with an emphasis on emerging markets. It was founded in 2012 by Gerson, who was a founding member of Blue Ridge Capital. As of September 30, 2014, the fund’s equity portfolio was valued at $1.55 billion. Their most valuable holdings included Spirit Aerosystems Holdings, Inc. (NYSE:SPR) with 3.35 million shares, Actavis plc (NYSE:ACT) (formerly Watson Pharmaceuticals) with 429,167 shares, and 480 shares of Warren Buffett’s Berkshire Hathaway Inc (BRK.A), which were valued at $206,900 each as of September 30, making Falcon Edge’s mere 480 shares worth over $93 million.
The disclosure by Falcon Edge of 2.22 million shares in Tekmira is remarkably similar to the disclosure of 2.21 million shares purchased by Peter Kolchinsky’s RA Capital Management, as we reported on just days ago. Both disclosures represented new positions in the company, and gave each hedge fund a 9.9% stake, though Falcon Edge owns 85,200 more shares. Both positions were also dated to January 12, the same day Tekmira Pharmaceuticals Corporation (NASDAQ:TKMR) announced a merger with OnCore Biopharma, with OnCore becoming a wholly-owned subsidiary of Tekmira.
That merger was clearly the impetus for the strong push into the stock by both funds. News of the merger was met positively by analysts, with RBC Capital announcing after the merger that they had raised their price target on Tekmira Pharmaceuticals Corporation (NASDAQ:TKMR) from $25.00 to $35.00. Maxim Group also raised their price target on the stock from $21.00 to $27.00. The stock responded in kind on January 12, rocketing up 57% from a close of $15.70 on the previous trading day, January 9 to a close of $24.68 on January 12.
The merger is good news for Tekmira Pharmaceuticals Corporation (NASDAQ:TKMR), which has struggled to bring drugs to market. In fact in 22 years, the Canadian company has yet to have a single treatment approved for sale. One of their most vaunted drugs last year was an Ebola treatment that sent their stock more than tripling in value during the first four months of the year, at the height of the Ebola scare. While that drug is still in testing, the stock quickly lost much of its gains after the U.S government ended up choosing an experimental treatment from Mapp Biopharmaceuticals to use on a handful of Americans afflicted with the ailment.
OnCore is seen as the perfect complement to help Tekmira Pharmaceuticals Corporation (NASDAQ:TKMR) get their highly touted hepatitis B treatment through testing and approved for consumer use. OnCore’s co-founder and President Michael J. Sofia, who will take the position of Chief Scientific Officer in the newly-merged company, was instrumental in the development of Sovaldi while with Gilead Sciences, Inc. (NASDAQ:GILD), a hepatitis C treatment that has proved very effective, and helped catapult Gilead into a $159 billion market cap company.
There is clearly a great deal of optimism among shareholders, analysts, and now some of the prominent hedge funds we track here at Insider Monkey, about Tekmira Pharmaceuticals Corporation (NASDAQ:TKMR) following the merger, which now creates the largest hepatitis B drug company in the world. We believe hedge fund activity, and in particular the activity of the funds we track, is a great indicator of the prospects for a stock from the brightest investment minds in the world. This strong activity on Tekmira from two of the funds we track makes a bold statement about this stock.
Other shareholders in Tekmira Pharmaceuticals Corporation (NASDAQ:TKMR) among the funds we track are Julian Baker and Felix Baker’s Baker Bros. Advisors, which owned 481,156 shares in Tekmira as of September 30, 2014, and Paul Tudor Jones’ Tudor Investment Corp, which owned 100,000 shares.
Disclosure: None
