Biopharma hedge funds have been on a buying spree the past several weeks. Many of them reported in regulatory filings that they have initiated positions of at least 5 percent in individual stocks or boosted positions to well in excess of 5 percent of outstanding shares.
No firm, however, has been nearly as aggressive as RA Capital Management. In just the past four weeks, it has filed seven initial 13G or 13D documents indicating new investments of 5 percent or more. It also filed amended documents saying it has added to positions in at least four companies that are now holdings of 5 percent or more. Two of the new positions currently rank among the firm’s top-18 holdings, and three stocks in which RA Capital increased existing stakes were catapulted into the firm’s top eight.
This flurry of activity is unusual among life sciences and biopharma hedge funds, which rarely shuffle their portfolio’s largest positions from quarter to quarter. They are generally more of a buy-and-hold crowd, betting on firms they believe have the next drugs with the potential to receive FDA approval. Of course, given these fledgling companies’ small market caps, it does not take much capital to reach the 5 percent that triggers a 13D or 13G filing.
RA Capital is headed by founder Peter Kolchinsky and managing partner Rajeev Shah. As Institutional Investor previously reported, its hedge fund is up 14 percent for the year through March.
With the recent transactions, three stocks have moved onto the firm’s top-ten list.
Janux Therapeutics is the firm’s fourth-largest long, representing 5.72 percent of RA Capital’s U.S. common stock assets after the stake was boosted by more than 15 percent. The hedge fund firm now owns about 20 percent of the total shares outstanding. It is no stranger to Janux, as it was a major venture capital shareholder before the company went public in 2021. Janux is designing T cell immunotherapies that will kill tumors without impacting healthy tissue.
89bio is the seventh-largest long since RA Capital expanded its stake by nearly 25 percent. The hedge fund now has more than 15 percent of the clinical-stage biopharmaceuticals company, which develops therapies for liver and cardiometabolic diseases.
And Tyra Biosciences is the eighth-largest long after the firm recently lifted its stake by about 45 percent. RA Capital now owns more than 25 percent of the total shares. Tyra describes itself as a clinical-stage biotechnology company focused on developing next-generation precision medicines that target large opportunities in fibroblast growth factor receptor biology.
RA Capital’s largest new positions are Dyne Therapeutics, a clinical-stage biotech company that is innovating muscle-targeted therapeutics for genetic diseases, and Edgewise Therapeutics, a muscle disease biopharmaceuticals company. They rank 16th and 18th, respectively, in the U.S. portfolio.