Andreas Halvorsen (Trades, Portfolio)'s Viking Global Investors recently participated in the initial public offering of biotech company Athira Pharma Inc. (ATHA, Financial). According to GuruFocus Real-Time Picks, a Premium feature, the firm owns 2,120,653 common shares of Athira as of Sept. 18, representing 6.88% of the company's total shares outstanding at the time (though, note that the share count can often change rapidly following an IPO).
Connecticut-based Viking Global Investors considers fundamentals and management to be some of the most important factors when identifying investment opportunities. The firm also takes positions based on broader cyclical and industry trends. Halvorsen is one of the so-called "Tiger Cubs" who were taught by Julian Robertson (Trades, Portfolio) of Tiger Management.
Investing in Athira
According to Athira's S-1 filing with the Securities and Exchange Commission, which is dated Aug. 26, Viking was one of the initial investors that backed the company as it went public. Viking purchased 2,173,913 shares of common stock underlying warrants and 8,695,652 shares of series B convertible preferred stock. SEC filings also state that prior to the IPO, Viking had beneficial ownership of 10,869,565 shares in aggregate (both common and preferred), representing 7.8% of shares beneficially owned.
The company debuted on Sept. 18 for $17 per share. Since then, the price of the stock has fallen 5% to trade around $16.09 on Sept. 25.
Athira Pharma is a clinical-stage biotech company based in Seattle. Its focus is on developing regenerative therapies for neurological diseases, particularly Alzheimer's and Parkinson's disease. It is currently in the midst of two early-stage human trials for its Alzheimer's drug candidate ATH-1017.
Near the time of the IPO, Athira's CEO, Dr. Leen Kawas, briefly described the company's drug pipeline as follows in an interview with Yahoo Finance:
"Athira Pharma is developing a platform of small molecules that focuses on recovery of neuronal health and function, which applies for both central indications, like Alzheimer's and Parkinson's, and peripheral indications. We have our most advanced product that is starting its first potential pivotal trial in Alzheimer's disease. And we're also going to start next year a phase II Parkinson's disease dementia trial for the same product. We have additional assets in our pipeline for peripheral neuropathy and neuropsychiatric indications that are at the preclinical stage."
Other investments
Athira isn't the only health care stock that Viking has invested in this year, or even the only biotech IPO. The firm also picked up shares of online health insurance marketplace company GoHealth Inc. (GOCO, Financial) on July 17 and participated in the IPO of biotech company Inhibrx (INBX, Financial) on Aug. 21. Health care now represents 32.64% of its equity portfolio, though this is slightly down from 37.93% a year ago after the sale of some big positions like the one in health care plans company Anthem (ANTM, Financial).
After health care, Viking's next favorite sectors at the moment are technology with 19.28% of the equity portfolio and financial services with 14.60%. Altogether, the equity portfolio currently consists of 71 common stock positions valued at a total of $23.14 billion.
Disclosure: Author owns no shares in any of the stocks mentioned. The mention of stocks in this article does not at any point constitute an investment recommendation. Investors should always conduct their own careful research and/or consult registered investment advisors before taking action in the stock market.
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