Guru investor Steven Cohen (Trades, Portfolio), who heads up the multibillion-dollar hedge fund Point72 Asset Management, disclosed he established a 5.2% stake in Nightstar Therapeutics Ltd. (NITE, Financial) on Aug. 6, adding to his holdings in the health care space.
With approximately $13 billion in assets under management, the Connecticut-based firm seeks to deliver superior risk-adjusted returns using long, short, macro and systematic strategies. Cohen founded Point72 in 2014 after his former hedge fund, S.A.C. Capital Advisors, was shut down following an insider trading investigation.
According to GuruFocus real-time picks, Cohen invested in 1.5 million shares of the British company, which debuted on the Nasdaq last September, for an average price of $17.95 per share, allocating 0.11% of his equity portfolio to the stake.
The clinical-stage biotechnology company, which focuses on developing gene therapies for rare retinal diseases, has a $481.47 million market cap; its shares were trading around $16.9 on Wednesday morning with a price-book ratio of 3.87.
While the stock price has tumbled 31% since its initial public offering, GuruFocus estimates it has climbed approximately 27% year to date.
Nightstar’s lead therapy, NSR-REP1, is being developed to treat choroideremia, a genetic condition most commonly found among males that causes progressive vision loss. Another developing therapy the company highlights on its website is NSR-RPGR, which is for the treatment of X-linked retinitis pigmentosa, an inherited recessive retinal disease caused by mutations in the RPGR gene. This condition, which is prevalent among boys and young men, also causes progressive vision loss.
Two other drugs in its pipeline are NSR-ABCA4 and NSR-BEST1, which target Stargardt disease and Best disease.
Nightstar reported first-quarter results in June, posting a net loss of $14.4 million, or 52 cents per share. In the year-ago quarter, it recorded a net loss of $3.4 million, or 30 cents per share.Ă‚
Supported by a high Altman Z-Score, which measures a company’s fiscal stability, and no debt, GuruFocus rated Nightstar’s financial strength 8 out of 10. The company’s profitability and growth did not fare as well, scoring a 4 out of 10 rating as it has a low Piotroski F-Score of 3, which suggests poor operating conditions.
While Cohen is currently the company’s only guru shareholder, Paul Tudor Jones (Trades, Portfolio) took an interest in the stock at the time of its IPO. He closed his position in the fourth quarter, however, after losing an estimated 25% on the investment. GuruFocus estimates Cohen has lost about 7% on his investment so far.
Health care-related stocks make up approximately 16.9% of the guru’s equity portfolio, making it the second-largest sector represented after the consumer cyclical sector. In recent months, Cohen has also taken an interest in Catalyst Biosciences Inc. (CBIO, Financial) and Acadia Pharmaceuticals Inc. (ACAD, Financial). Additional health care stocks he is invested in, as of March 31, are Merck & Co. Inc. (MRK, Financial), Thermo Fisher Scientific Inc. (TMO, Financial), Allergan PLC (AGN, Financial), The Cooper Companies Inc. (COO, Financial), LivaNova PLC (LIVN, Financial), Boston Scientific Corp. (BSX, Financial) and Bio-Rad Laboratories Inc. (BIO, Financial), among others.
Disclosure: No positions.
