Most biopharma and life sciences hedge funds posted small losses last month. Even so, most remain in the black for the year, with many up by double-digit rates.
“Biotech markets pulled back in July, with performance led by large pharma (up 3.6 percent) and specialty pharma (up 2.8 percent), while small- and microcap names lagged; specialty pharma remains positive on the year but continues to trail other subsectors,” says a monthly life sciences review published by investment bank MTS Health Partners.
The top performer continues to be Affinity Healthcare Fund. It rose 8.3 percent for the month, boosting its gain for the year to 45.5 percent, according to an investor and a hedge fund database. It received a nice boost from Spyre Therapeutics, which recently reported good news on its drug pipeline. In August, its stock’s price target was raised by at least two investment banks.
Janus Henderson Biotechnology Innovation Fund also made money in July, gaining 3.8 percent. It is now up nearly 18 percent for the year, per an investor and the database.
In its second-quarter outlook, dated July 23, the investment firm asserted that health care stocks “continue to trade at meaningful valuation discounts relative to both historical averages and the broader S&P 500 Index, providing a favorable backdrop for active stock selection.”
It added, “We remain encouraged by developments across the health care landscape and believe the sector offers an attractive opportunity for patient investors… We see potential across early commercial-stage companies with breakthrough products, as well as lower-risk, late-stage development companies that face less clinical uncertainty.”
Otherwise, most biopharma funds lost money last month.
Volatile Casdin Capital, for example, dropped 2 percent. But it is up 32 percent for the year, according to an investor. Its two largest positions — Revolution Medicines and GeneDx Holdings — accounted for roughly one-third of the stock portfolio at the end of the first quarter. The former is up roughly 150 percent for the year, the latter down nearly 40 percent. No. 3 long BioLife Solutions, which makes up 10.5 percent of assets, has climbed 44 percent in 2026.
Elsewhere, Perceptive Advisors lost 2.8 percent in July, trimming its gain for the year to 13.7 percent, an investor says. The firm's largest long position, Praxis Precision Medicines, which represented nearly 13 percent of assets at the end of the first quarter, dropped 8 percent. But the stock has already surged more than 23 percent this month after beating estimates and receiving a price target increase from Wells Fargo.
RA Capital, for its part, lost 1.8 percent in July and is now up 13 percent for the year, according to an investor.
RTW Investments fell 2.1 percent last month but is up 6.4 percent for the year, says an investor. Soleus Capital fell 3 percent last month yet is up 5.7 percent for 2026, two investors report. Avoro Capital Advisors dropped more than 6 percent in July and is up about 10 percent this year, according to an investor.
Averill’s share class that includes only public securities dropped 7 percent last month and is off 3 percent for the year. The company's share class that includes private assets lost 8 percent in July but remains up 12.9 percent for the year, per an investor.
Averill’s Madison posted a 6 percent loss in the public markets-only class and has declined 3 percent this year. Its share class that includes private assets dropped 8 percent for the month but is still up 21 percent for the year, the investor says.
