Best biotech investors?
Who are the best biotech investors on the street? Is it the L/S pod guys? Or places like orbimed / commodore capital?
Very curious to know ppls thoughts on this. Strictly speaking public equities.
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(i) Baker Bros Advisors/Investments is top, but good luck getting a job there. (ii) Frazier Life Sciences
In absolute returns? Never heard of Frazier
Avoro, RTW
There are only a few pods out there that take fat bets on binaries. Most will play them but have tiny positions relative to the SMs
Really? I didn’t know that. Is that bc of the nature of MMs? Very tight risk parameters.
Hard to hedge/make a pair on binary bets.
Drawdown limits are usually 2% capital cut in half / 4% you’re gone. If you have a 5% long position that gets halved in a binary your capital is cut. (This is oversimplified but you get it)
Most gross is in large pharma with clinical biotech bets are $5M positions
Pretty much all SM biotech investors are 99% correlated to XBI..
This doesn't really makes sense does it? If you're taking large bets on binaries, in a given year, your returns should be a function of your hit rate on the stock move, right? I'm sure the XBI influences return to some extent but I wouldn't think it would be the most significant factor.
and yet empirically we have seen they're massively correlated to xbi
draw your own conclusions on what that means
Logos Capital, not a pure player in public equities but they have public and private assets in their portfolios. Public investments have driven the bulk of returns in recent vintages.
They almost blew up..
I wasn't aware of that, but the last three vintages of their opportunities funds we are LPs of and they are doing extremely well. I didn't participate in the underwriting of them specifically but also didn't hear any mention of a near blow up.
recent returns at scale? Kynam, Janus, Farallon HC team
brand names with big books? Orbi Perceptive Baker RTW
Cormorant, Braidwell, MPM, Janus, Logos, and Tang have been doing very well recently. Would check the recent PIPE’s where the big names are and find the smaller names you don’t normally hear of
Logos is not doing well lol. Far from it
Can you elaborate? I have an interview with them coming up.
Define doing “well” - just outperforming XBI? On an absolute basis, I’d say all of those funds except maybe Tang are not doing well and are likely seeing redemptions.
Take Cormorant for example - see their two largest holdings, one of which was sized up in a PIPE that immediately crashed on poor data.
If you want to know funds doing well, Just look at top performing biotech stocks YTD and see who held them in size; and chances are they’re outperforming. There’s been few high profile catalysts this year that’ve worked out, but if they did, you’d reasonably expect those funds to be outperforming the XBI if not just outright up (e.g. Vivo with their $750mm fund raise).
That’s a decent way to look at it, but chances are that 13-F’s don’t track actual performance. AFAIK, EcoR1 is the only fund going through redemptions right now.
Cormorant was down 30% YTD at the end of March, likely flat to down slightly since then.
Baker Bros....
Anyone know of what going on with some of the big funds? Rumors of shops closing?
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