Viking Global Investors LP, the firm managed by Andreas Halvorsen (Trades, Portfolio), disclosed in a regulatory filing that it boosted its holding in 4D Molecular Therapeutics (FDMT, Financial) in May according to GuruFocus Real-Time Picks, a Premium feature based on Schedule 13D, 13G and Form 4 filings.
Prior to founding the Greenwich, Connecticut-based firm, Halvorsen worked as senior managing director and director of equities at Tiger Management (Trades, Portfolio). Viking employes a research-intensive, long-term-focused investing approach, applying fundamental analysis to select public and private equity investments around the globe. The firm centralizes risk management and focuses on cyclical and secular industry trends.
Viking purchased 850,000 shares of 4D Molecular Therapeutics (FDMT, Financial), expanding the position by 21.59% and its 13F equity portfolio by 0.07%. The stock traded around $16 on the May 9 transaction date.
Investors must be aware the above trade is not part of the firm’s first-quarter 13F filing, but a real-time pick that the firm made in May. If the guru makes a trade in a company where he or she owns more than 5% of the total shares outstanding, the guru must file a Schedule 13D / 13G filing within 10 business days of the trade.
However, if the guru owns more than 10% of the company’s total shares outstanding, the guru must instead file a Form 4 filing within two business days of the trade. Viking Global owns approximately 14.4% of 4D Molecular Therapeutics’ total shares outstanding as of Friday.
Company background
The Emeryville, California-based clinical-stage gene therapy company seeks to develop genetic medicines using its proprietary invention platform, Therapeutic Vector Evolution. The company focuses on three therapeutic areas: ophthalmology, cardiology and pulmonology.
On Wednesday, the company said it made progress in developing its 4D-150 candidate for the intravitreal treatment of wet age-related macular degeneration and diabetic macular edema. The company considered several dose cohorts, including 3E10 vg / eye, 1E10 vg / eye and 6E9 vg / eye.
The company also has candidate treatments for cystic fibrosis, lung disease and geographic atrophy.
As of Friday, the company has a market cap of $587.94 million and an enterprise value of $364.25 million. The stock trades at around $17.69, approximately 2.5 times its book value per share.
Company financial strength position
4D Molecular Therapeutics’ financial strength ranks 7 out of 10 on the back of debt-to-equity ratios outperforming approximately 64% of global competitors despite cash-to-debt ratios outperforming just over 57% of global biotech companies.
The company said that cash, cash equivalents and marketable securities were $202 million as of March 31, down from $218 million as of December 2022. The decrease in cash was driven by cash used in operations.
For the year ending December 2022, the company had total assets of $261.8 million, including $220.5 million in total current assets and $41.3 million in total long-term assets.
Likewise, the company had total liabilities of $30.5 million as of December 2022, including $15.7 million in total current liabilities and $14.8 million in total long-term liabilities.
Company profitability overview
4D Molecular Therapeutics’ profitability ranks 1 out of 10 on several warning signs, which include a low Piotroski F-score of 2 out of 9 and profit margins that underperform more than 84% of global competitors.
The company reported a net loss of $28.7 million for the quarter ending March 31, compared to a net loss of $26.3 million for the prior-year quarter. The higher net loss is driven by higher research and development expenses due to the progression of the company’s clinical trials.
For the year ending December 2022, 4D Molecular Therapeutics reported a net loss of $107.5 million. While the company generated $3.1 million in revenues primarily from its collaboration and license agreements with uniQure, the company recorded $113.2 million in total operating expenses, including $32.9 million in selling, general and administrative expenses and $80.3 million in research and development expenses.
Company growth overview
The company’s growth ranks 1 out of 10 on the back of three-year revenue decline rates underperforming approximately 81% of global competitors and three-year earnings growth rates underperforming approximately 49% of global biotech companies.
Despite the company having low growth and profitability, 4D Molecular Therapeutics does not have enough data to compute ranks for momentum and GF Value and thus, the company’s GF Score of 22 out of 100 may give an incomplete picture of the stock’s potential.
See also
Other gurus with holdings in 4D Molecular Therapeutics include Steven Cohen (Trades, Portfolio)’s Point72 Asset Management and Jim Simons (Trades, Portfolio)’ Renaissance Technologies.
Viking Global Investors has not released its first-quarter 13F equity portfolio yet as of this writing. As of December 2022, the firm’s $19.90 billion 13F equity portfolio contains 76 stocks with a quarterly turnover ratio of 19%. The top three sectors in terms of weight are health care, financial services and technology, accounting for 38.75%, 22.18% and 17.51% of the equity portfolio.
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
