Biopharma had quite the September — and a strong quarter.
The seemingly floundering and loss-plagued biopharma sector posted another month of strong gains in September, capping a remarkable quarter of performance. Most funds are now not only profitable but are up by double-digit percentages after being in the red as recently as the end of June.
Since early April, the Nasdaq Biotechnology Index is up about 36 percent. Many biopharma and life sciences hedge funds have risen even more in that time frame.
For example, RTW Investments climbed 9 percent in September and is now up 31.7 percent for the year, according to two people, including an investor. It was down 3.7 percent in the first quarter.
“We are increasingly optimistic that a biotech recovery could gain momentum,” the biotech hedge fund firm’s founder, Rod Wong, told clients in a letter dated September 2 and obtained by Institutional Investor. “We continue to see a large number of asymmetric opportunities and are excited for a number of development-stage events and key new product launches this fall.”
He said in the second-quarter client letter that several policy uncertainties had been resolved, such as the naming of new Food and Drug Administration leaders (commissioner Marty Makary and chief medical and scientific officer Vinay Prasad) who “have very publicly shared their vision for [the] FDA’s future.”
Wong further asserted that the drug-specific tariff threat introduced alongside Liberation Day tariffs “translated into one of the Trump administration’s fastest wins,” noting that more than half of multinational pharmas have committed to reshoring nearly $300 billion in manufacturing.
The sector is also benefiting from big pharma companies’ acquiring companies with attractive drug pipelines.
Elsewhere, RA Capital surged 10.3 percent in September and is now up 15.5 percent for the year. It was down 15.2 percent as recently as the end of May. Avoro Capital Advisors is up 15.8 percent after climbing 11 percent in September and 18 percent in August. It had been off by 11.6 percent through July. Janus Henderson Biotech Innovation Fund has gained 13.8 percent for the year after being down 14.5 percent through April.
Perceptive Advisors, for its part, rose 9 percent in September and is up 17 percent for the year. It was down about 15 percent through May. Affinity Healthcare Fund is now up 18.28 percent after adding more than 12 percent in September and about 11.5 percent in August. It had been down 14 percent or so through May. Soleus Capital Management was up 1 percent in September and approximately 7 percent for 2025. It had been flirting with the first loss in its history.
Other funds were already enjoying strong years and continue to enjoy gains.
Nantahala Capital Partners jumped 12 percent last month and had increased nearly 54 percent for the year. Roughly half of its capital is invested in fledgling biopharma stocks. The GPP Biopharma Fund is up more than 45 percent after surging 47 percent in the third quarter. Even Averill Partners, known for its short-selling, is now in the black, up 1.7 percent for the year.
However, several funds remain in the red.
EcoR1 Capital is still down nearly 15 percent for 2025 even after adding 8.8 percent in September and 3.7 percent in August. Casdin Capital has been able to cut its loss for the year to just above 10 percent after being in the low–30 percent range earlier this year.
