Billionaire investor Steven Cohen (Trades, Portfolio), who heads up hedge fund Point72 Asset Management, disclosed he upped his stake in Karyopharm Therapeutics Inc. (KPTI, Financial) on Feb. 22.
The guru’s Connecticut-based firm uses long, short, macro and systematic strategies to generate superior risk-adjusted returns.
According to GuruFocus real-time picks, a Premium feature, Cohen boosted his stake in the Newton, Massachusetts-based company by 127.39%, buying 1.96 million shares for an average price of $5.07 per share. He now holds 3.5 million shares. GuruFocus data shows he has lost approximately 28% on the investment since establishing it in the fourth quarter of 2017.
The clinical-stage pharmaceutical company, which develops novel drugs to treat cancer and other major diseases, has a $248.9 million market cap; its shares were trading around $4.10 on Friday with a price-book ratio of 1.46 and a price-sales ratio of 6.93, which GuruFocus says are near multiyear lows.
The median price-sales chart shows the stock is trading below its historical value.
On Feb. 28, Karyopharm reported fourth-quarter and full-year 2018 results. For the quarter, the company posted a net loss of 96 cents per share. For the year, it recorded a net loss of $3.14 per share on $30.3 million in revenue.
The company also updated investors about its selinexor drug, which is undergoing clinical trials for the treatment of triple class refractory multiple myeloma. Earlier this week, the U.S. Food and Drug Administration’s Oncologic Drugs Advisory Committee decided to delay making a final approval decision until after the Phase 3 Boston study is completed. In a statement, CEO Michael G. Kauffman, M.D., expressed that while he is disappointed with the committee’s verdict, he is grateful for their support.
“We intend to work closely with the FDA to evaluate the best path forward as they complete their review of our New Drug Application,” he said. “We remain committed to delivering on our vision of bringing selinexor into the hands of the physicians and patients who are battling highly refractory multiple myeloma.”
GuruFocus rated Karyopharm’s financial strength 9 out of 10. Although the company has no long-term debt and comfortable interest coverage, the Altman Z-Score of -1.61 warns it is in danger of going bankrupt as its Sloan ratio indicates it has poor earnings quality. The company has also seen its revenue per share decline over the last five years.
The pharmaceutical company’s profitability and growth fared even worse, scoring a 2 out of 10 rating as a result of negative margins and returns that underperform a majority of competitors, a declining operating margin and a low Piotroski F-Score of 3, which suggests business conditions are poor.
With 2.54% of outstanding shares, Cohen is Karyopharm Therapeutics’ largest guru shareholder. Jim Simons' (Trades, Portfolio) Renaissance Technologies and Louis Moore Bacon (Trades, Portfolio) also have positions in the stock.
After slipping 2% in 2018, GuruFocus shows the stock has tumbled 58% year to date.
Portfolio
Cohen’s $20.47 billion equity portfolio, which is composed of 922 stocks as of the end of fourth-quarter 2018, is largely invested in the health care sector, followed by smaller holdings in the consumer cyclical, technology and energy sectors.
As of the fourth quarter, the investor’s top five holdings were Encana Corp. (ECA, Financial), Alphabet Inc. (GOOGL, Financial), Baxter International Inc. (BAX, Financial), Visa Inc. (V, Financial) and Alibaba Group Holding Ltd. (BABA, Financial).
Disclosure: No positions.
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