At least four hedge funds are prominent investors in Satsuma Pharmaceuticals, one of the latest biopharma companies seeking to go public. They control nearly half of its shares.

The largest investor is RA Capital Management with about 15.7 million of Satsuma's common shares, or a 30.2 percent stake, according to a preliminary prospectus filed this month for an initial public offering. Funds affiliated with Caxton Corp., Citadel, and Cormorant Asset Management also own shares of the clinical-stage, biopharmaceutical company.

Satsuma, which is developing a therapeutic product for the acute treatment of migraine, has not yet disclosed how many shares it intends to offer or at what price. The San Francisco-based company plans to use the proceeds from the IPO to fund Phase 3 clinical trials, according to the prospectus.

Like many drug developers, Satsuma has no products or revenues. The company has funded operations with a total $78.8 million raised from the sale of convertible preferred stock, a convertible promissory note, and long-term debt, the filing shows. 

A little less than half of the common stock held by RA Capital is issuable upon the conversion of series A preferred stock directly held by RA Capital Healthcare Fund, the firm’s hedge fund. Another third or so of the shares are issuable upon the conversion of series B preferred stock directly held by RA Capital Fund. A separately managed account owns the remainder of the shares.


In July, RA Capital Management announced that it raised a little more than $300 million for its first venture investment pool, RA Capital Nexus Fund. This boosted the firm’s private deal capacity to nearly $1 billion and total assets under management to about $2.5 billion, according to the announcement.

RA Capital said at the time that it has made more than 100 private company investments since 2012, and in recent years has been building companies from scratch.

Entities affiliated with CAM Capital own 5.5 percent of Satsuma’s common stock, the IPO prospectus shows. Most of its shares are issuable upon the conversion of series B preferred stock directly held by CDK Associates, while the rest of the shares are held by Third Street Holdings. Andrew Law’s Caxton Alternative Management is the investment manager for CDK and Third Street, and Caxton Corp. is the general partner of CAM, according to the filing.

Meanwhile, Ken Griffin’s Citadel Multi-Strategy Equities Master Fund owns 5 percent of the shares. In addition, entities affiliated with Cormorant Asset Management own 5 percent of the shares. The investment is held by Cormorant Private Healthcare Fund II, Cormorant Global Healthcare Master Fund, and CRMA SPV, LP.

Bihua Chen, founder and portfolio manager at Cormorant Asset Management, was one of the featured speakers at the Sohn Investment Conference in May in New York City. She talked up shares of Reata Pharmaceuticals, which is developing a drug to fight kidney disease.