Trellus Management’s Top Biotech Stock Picks For Q4

#3 Fibrocell Science Inc (NASDAQ:FCSC)

Shares Owned by Trellus Management (as of September 30): 114,936 shares

Value of Holding (as of September 30): $443,000

With year-to-date gains of 71.43%, Fibrocell Science Inc (NASDAQ:FCSC) is among the only two biotech stocks in this list that is trading in the green this year. Trellus Management initiated a stake in the company during the second quarter and didn’t made any changes to its holding during the third quarter, even though shares of the autologous cell therapy company saw extreme volatility during the July-September period. A major part of this volatility was witnessed on and after September 25, when shares of the company slumped heavily on the back of a regulatory update it provided for its product candidate, FCX-007. Following this update, on September 28, analysts at Wedbush downgraded the stock to ‘Neutral’ from ‘Outperform’ and also lowered their price target on it to $6 from $7. For its third quarter results scheduled for tomorrow, analysts expect Fibrocell Science Inc (NASDAQ:FCSC) to report a loss of $0.16 per share, $0.02 per share more than the loss it reported for the same quarter last year. Marc Lisker, Glenn Fuhrman and John Phelan‘s MSDC Management was the largest shareholder of the company among the hedge funds we cover, holding over 1.72 million shares of the company as of June 30.

#2 Regulus Therapeutics Inc (NASDAQ:RGLS)

Shares Owned by Trellus Management (as of September 30): 100,000 shares

Value of Holding (as of September 30): $654,000

Moving on, Trellus Management added 25% or 20,000 additional shares of Regulus Therapeutics Inc (NASDAQ:RGLS) to its portfolio during the third quarter. Regulus Therapeutics Inc (NASDAQ:RGLS) is a biopharmaceutical company engaged in developing microRNAs to treat a variety of diseases. The steady decline that the stock of has endured since March has resulted in it trading down by 52.68% year-to-date. However, in the last few days the stock has climbed up by more than 15% in anticipation of the company’s third quarter results, which are also scheduled to be reported tomorrow. Analysts are expecting the company to report a loss of $0.37 per share on revenue of $2.85 million for the quarter, compared to a loss of $0.41 per share on revenue of $3.80 million that it reported for the same quarter of last year. Yesterday, Regulus announced that it has expanded the development of its product, RG-101, through a clinical trial collaboration and formulation development agreement with GlaxoSmithKline plc (ADR)(NYSE:GSK). Analysts at Wedbush reiterated their ‘Buy’ rating on the stock on November 2, while increasing their price target on it to $39 from $23. Paul Orlin and Alex Porter‘s Amici Capital was one of the hedge funds that initiated a stake in the company during the second quarter, purchasing 75,000 shares.

#1 Synergy Pharmaceuticals Inc (NASDAQ:SGYP)

Shares Owned by Trellus Management (as of September 30): 162,900 shares

Value of Holding (as of September 30): $863,000

Finally, Synergy Pharmaceuticals Inc (NASDAQ:SGYP) remained Trellus Management’s top biotech pick, even though the stock lost 36% during the third quarter and Trellus Management didn’t acquire any additional shares of the company. The developer of drugs to treat gastrointestinal (GI) disorders and diseases has been one of the best performing biotech stocks this year despite the recent slump, with year-to-date gains of almost 120%. A significant portion of those gains followed the company’s announcement on June 17 that its drug to treat idiopathic constipation, Plecanatide, met its main goal in a late-stage trial. On October 29, Michael Higgins, analyst at Roth Capital released a note to investors in which he reinitiated coverage on Synergy Pharmaceuticals Inc (NASDAQ:SGYP) with a price target of $9.50. In his note, Higgins mentioned that he expects Synergy to launch Plecanatide in 2017, “with the most impressive clinical profile in a category that’s growing 39 percent and on track to become a $3 billion market in 2018.” Billionaire investor John Paulson‘s Paulson & Co was the largest shareholder of the company at the end of June among the hedge funds covered by Insider Monkey, with ownership of over 5.78 million shares.

Disclosure: None