Halvorsen Invests in Gene Editing Med Company With Gates, Google

Viking Global buys more of Editas Medicine, a developer of technology to treat genetic diseases through fixing faulty genes

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Feb 10, 2016
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Andreas Halvorsen (Trades, Portfolio), founder of $30 billion hedge fund Viking Global Investors, on Tuesday disclosed a sizable position in the initial public offering of a company pioneering the field of gene editing technology, Editas Medicine Inc. (EDIT, Financial), which also held the first IPO of the year.

Havorsen’s Global Opportunities Illiquid Investment Sub-Master was one of the company’s seven largest equity holders before the offering, according to IPO documents. He joined a group of venture capital firms, as well as Alphabet’s Google Ventures and Bill Gates (Trades, Portfolio) in backing the company by purchasing $163.3 million in preferred stock.

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According to a regulatory filing, Halvorsen’s 4,444,444 shares of Series B preferred stock on Feb. 8 automatically converted to 1,709,401 shares of common stock on the company’s IPO. Viking also acquired a total 1 million Editas shares across its funds at $16 per share in connection with the IPO and another 20,407 shares on the open market at a purchase price of $18 on the same day. The total of the transactions gave him 2,729,808 shares, equivalent of 7.5% of the company.

Editas shares popped as high as $19.42 per share following their IPO, but have lost more than 27% since to around $13.09 each in mid-afternoon trading, with a market cap of $381.1 million.

Cambridge, Massachusetts-based Editas is the first company developing technology to treat diseases by correcting faulty genes to seek capital from public equity markets. Through a technology dubbed CRISPR-Cas9 (clustered, regularly interspaced short palindromic repeated) that makes direct changes to DNA, it hopes to first target debilitating genetic illness with no approved treatments. It has more than a dozen such research programs in place, the most developed of which is to treat a genetic form of genetic blindness. The company won’t begin clinical trial of the program until 2017.

Editas estimates that fewer than 5% of the 6,000 diseases caused by genetic mutations have approved therapies. With a slew of medical doctors and scientists among its founders, Editas has a portfolio of 20 patents and 200 more patents pending. It also has many competitors, such as Caribou Biosceinces, Intellia Therapeutics and CRISPR Therapeutics, among which it or one of its current or former scientists face several patent and rights disputes.

Financially, Editas has had net losses of about $75.8 million since its inception in September 2013 through Sept. 30, 2015, with no revenue from sales. The company said it expects to incur significant expenses and operating losses, and revenue likely only through payments from collaborations with other drug companies for the foreseeable future.

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