How are biotech investors doing?
XBI -30% YTD after coming off a rough 2H 2021. Anyone have any data points or anecdotes on how biotech funds are doing so far this year? I understand a couple of the brand name funds were down 70%+ last year and liquidated, but I’ve heard little this year about the situation. XBI continues to hit new 52-week lows so would be curious to hear want sentiment and job security is like right now.
bump
I thought investments were up for biotech/biopharm?
Not small/mid-cap biotech. See below article from Dec 2021, but it’s gotten significantly worse since.
https://www.wsj.com/amp/articles/hedge-funds-suffer-big-losses-on-biote…
Can you PM?
This is so odd. We got off the meetings and heard positive news.
Biotech seems like a tough area
Novartis is restructuring.
Nektar Therapeutics announced a 70% layoff.
Insanity.
A lot of people think this is the worst biotech tape they’ve seen.
Unlike tech biotech has been drawing down since February last year. Brutal
Not my sector thank god but have some friends. It’s certainly brutal for anyone not neutral. I don’t know whether there has been rotation within the sector such that even neutral books are getting destroyed or if they’re holding up, but everyone I know who is net long / I.e., founder led funds is getting killed.
Heavy investments into MXCT/VRTX have saved my portfolio gradually moving my VRTX weight into MXCT. The rest of the biotech space well, my portfolio is in pain.
So all I have is secondhand anecdotal information, but I was working on a capital raise in late Q3 2021 and a PM at a fund we have a good relationship with told us some pretty brutal performance #s while we were on a call with them for the deal (in a sort of "we like this deal but doubt you'll get this done because all the funds are getting smoked right now" kind of way). I can't imagine that they have gotten any better either since. The ones he listed were:
RTW: down ~40%
Perceptive: down ~30%
Casdin: down ~45% (I also heard that LPs were super pissed at them since they personally sponsored their SPACs instead of the promote going to the fund)
A friend of mine in biotech equity research told me Logos totally blew up - not 100% sure but I haven't seen them do any deals recently
Tang: more of a family office than a fund but between Odonate, LJPC, HRTX, etc. blowing up, Kevin is in a real liquidity crunch, wouldn't surprise me if he's down >75%.
BlackRock: you can see the performance of their ETFs in the market - they write plenty of checks out of funds like BMEZ, which is down ~40% in the last year.
Orbimed: supposedly down >40% as of November per this article https://www.wsj.com/articles/hedge-funds-suffer-big-losses-on-biotech-r…
Cormorant: down ~40%
Consonance closed their public markets hedge fund
I'm sure Surveyor/Citadel is getting massacred too - they were throwing money into everything and were drawing down deeply into Citadel's pockets.
All the numbers above were as of 3-6 months ago. Wouldn't be surprised if they have crossed the 50% loss threshold. It's a slaughter out there. Not to mention, a lot of these funds have substantial private company portfolios that probably aren't being properly marked to market either, so the losses are likely understated.
These are for 2021, correct? I’ve heard similar if not worse numbers as well. Seems that a couple of these funds have posted similar returns YTD for 2022, especially after a brutal April. Incredible how biotech went from a safe haven to its current state.
Yes these are mostly for 2021, and I'm extrapolating a bit into 2022 with the estimate of 50%+ losses
Know at least one citadel HC pod got let go last summer
If you have a long term horizon backing the truck up on XBI seems like a no brainer, no?
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