Steven Cohen (Trades, Portfolio), leader of Point72 Asset Management, disclosed earlier this week he increased his stake in IDEAYA Biosciences Inc. (IDYA, Financial) by 52.12%.
To generate 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 that focus on fundamentals and macroeconomic conditions.
According to GuruFocus Real-Time Picks, a Premium feature, Cohen invested in 1.07 million shares of the South San Francisco-based biotech company on Feb. 17, impacting the equity portfolio by 0.04%. The stock traded for an average price of $13.89 per share on the day of the transaction.
He now holds 2.05 million shares total, accounting for 0.11% of the equity portfolio. GuruFocus estimates Cohen has gained 16.6% on the investment since establishing it in the second quarter of 2019.
The synthetic lethality-focused precision medicine oncology company, which develops targeted therapeutics for specific patient populations using molecular diagnostics, has a $537.81 million market cap; its shares were trading around $13.81 on Friday with a price-book ratio of 1.7 and a price-sales ratio of 13.03.
While the stock has posted a 24.84% return since its initial public offering in May of 2019, shares are down over 40% year to date.
The company reported its third-quarter financial results in November, posting an earnings loss of 31 cents per share on $8.9 million in revenue.
In a statement, President and CEO Yujiro S. Hata also commented on the progress of the company’s pipeline drugs.
"Early clinical data on our potential best-in-class Phase 1 MAT2A inhibitor, IDE397, in MTAP-deletion patients shows preliminary signals of clinical activity, including pharmacodynamic modulation and tumor shrinkage in multiple patients,” he said. “In addition, we selected a lead compound as a potential first-in-class development candidate for IND-enabling studies for our PARG synthetic lethality program and made progress towards our goal to select a potential first-in-class development candidate with GlaxoSmithKline (GSK, Financial) for the Pol Theta Helicase program this year.”
In December, the company provided an update on its Phase 2 clinical trial evaluating the combination of darovasertib and crizotinib in treating metastatic uveal melanoma, noting it showed promising signs of tumor shrinkage among the participating patients and a manageable side effect profile.
The company is expected to disclose its fourth-quarter and full-year 2021 results in March.
GuruFocus rated IDEAYA’s financial strength 7 out of 10, driven by a comfortable level of interest coverage and a high Altman Z-Score of 3.72 that indicates it is in good standing.
The company’s profitability did not fare as well, scoring a 1 out of 10 rating on the back of negative margins. However, its returns on equity, assets and capital outperform over half of its industry peers. The moderate Piotroski F-Score of 4 out of 9 also suggests operations are typical for a stable company.
Cohen is the only guru invested in the stock currently with a 5.34% stake.
Portfolio composition
Cohen's $24.82 billion equity portfolio, which was composed of 1,044 stocks as of the three months ended Dec. 31, is most heavily invested in the technology and health care sectors.
Other biotech stocks the guru held as of the end of the fourth quarter included Argenx SE (ARGX, Financial), Krystal Biotech Inc. (KRYS, Financial), Jazz Pharmaceuticals PLC (JAZZ, Financial), Sarepta Therapeutics Inc. (SRPT, Financial), Seagen Inc. (SGEN, Financial) and Bicycle Therapeutics PLC (BCYC, Financial).
