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Sydnee Gatewood
Sydnee Gatewood
Articles (3388) 

Steven Cohen Shifts Into a Higher Gear With Bicycle Therapeutics

Guru's firm increases stake in clinical-stage biotech

Steven Cohen (Trades, Portfolio), head of Point72 Asset Management, disclosed this week his firm upped its stake in Bicycle Therapeutics PLC (NASDAQ:BCYC) by 175.4%.

With the goal of generating superior risk-adjusted returns, the billionaire guru's Stamford, Connecticut-based firm invests in a wide range of asset classes worldwide. Its long-short strategy is based on bottom-up research processes focusing on fundamentals and macroeconomic conditions.

According to GuruFocus Real-Time Picks, a Premium feature, Cohen picked up an additional 702,477 shares of the U.K.-based biopharmaceutical company on Sept. 14. The stock traded for an average price of $19.08 per share on the day of the transaction.

He now holds a total of 1.1 million shares, which represent 0.14% of the equity portfolio. GuruFocus estimates Cohen has gained 29.46% on the investment since establishing it in the fourth quarter of 2019.

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The clinical-stage biopharmaceutical company, which develops a novel class of medicines that target oncology indications with high unmet needs, has a $389.35 million market cap; its shares were trading around $20 on Wednesday with a price-book ratio of 5.15 and a price-sales ratio of 42.33.

The median price-sales chart shows the stock is trading above its historical value, suggesting it is overpriced.

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Bicycle reported its second-quarter results on Aug. 5, posting a loss of 67 cents per share. Cash and cash equivalents were $96.9 million, while research and development expenses totaled $8 million. General and administrative costs came in at $6.2 million.

In a statement, CEO Kevin Lee, Ph.D, discussed the company's ongoing projects, which he said have "made significant progress" despite challenges related to the Covid-19 pandemic.

"In the coming months, we look forward to initiating the Phase IIa trial of BT1718 and the Phase I/II trial of BT8009," he said. "We are also continuing to advance BT5528 in the dose escalation portion of a Phase I/II trial, and we will be deploying our proprietary EphA2 immunohistochemistry, or IHC, assay to select and enroll EphA2-positive patients in the Phase I trial. We remain confident in our ability to achieve our near-term milestones, which should help enable our vision of pioneering the development of novel therapies for patients suffering from cancer and other serious diseases."

GuruFocus rated Bicycle's financial strength 6 out of 10 on the back of comfortable interest coverage and a robust Altman Z-Score of 3.15.

The company is being weighed down, however, by negative margins and returns that underperform over half of its competitors. In addition, Bicycle has recorded a decline in revenue per share over the past 12 months.

With a 5.72% stake, Cohen is the company's largest guru shareholder. Jim Simons (Trades, Portfolio)' Renaissance Technologies also owns the stock.

Portfolio composition

Cohen's $15.33 billion equity portfolio, which was composed of 778 stocks as of the three months ended June 30, is most heavily invested in the health care, technology and consumer cyclical sectors.

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Additional biotech stocks the guru was invested in as of the end of the second quarter included Calithera Biosciences Inc. (NASDAQ:CALA), Aptevo Therapeutics Inc. (NASDAQ:APVO), Affimed NV (NASDAQ:AFMD), Acorda Theraputics Inc. (NASDAQ:ACOR) and Ideaya Biosciences Inc. (NASDAQ:IDYA), among many others.

Disclosure: No positions.

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