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Accipiter Capital Management is a New York-based healthcare specialist hedge fund that was founded by Gabe Hoffman in 2002. Prior to launching Accipiter, Hoffman worked at Welch Capital Partners, another New York-based fund, which also focuses on healthcare and prior to Welch, Hoffman followed biotech and pharmaceutical sectors at Paramount Capital, a biotechnology merchant banking firm and a hedge fund manager.

According to the latest 13F submission made to the SEC on May 17, Accipiter Capital Management owns a total of 22 stocks in its portfolio and the portfolio value is at approximately $128 million as of March 31st, 2011. Accipiter Capital has reduced the number of holdings to 22 in the last quarter from 29 in the previous quarter (4Q2010). Among the securities Accipiter removed from its portfolio in the last quarter are: Mannkind Corp (NASDAQ:MNKD), PureBioscience (OTCQB:PURE), M E L A Sciences Inc. (NASDAQ:MELA), Avanir Pharmaceuticals Inc. (NASDAQ:AVNR), Cytori Therapeutics Inc. (NASDAQ:CYTX), Neurogesx Inc. (OTCPK:NGSX), Dyax Corp (NASDAQ:DYAX), Sequenom Inc. (NASDAQ:SQNM), Covidien Plc (NYSE:COV), Mako Surgical Corp. (NASDAQ:MAKO), Zimmer Holdings (NYSE:ZMH), High Tech Pharmacal (NASDAQ:HITK), and Teva Pharmaceutical Industries Ltd. (NYSE:TEVA). In addition, Accipiter has closed its long positions in Biotime (NYSEMKT:BTX) and Cleveland Labs (NASDAQ:CBLI) and bought put options of the same two companies. Below is the summary of Accipiter’s activities since the last quarter of 2010 and the returns generated by each holding since March 31st.

Company Name

Ticker

Value

Activity

Return

AVANIR PHARMACEUTICLAS INC

AVNR

Sold Out

10.5%

BIOTIME INC

BTX

Sold Out

-30.3%

CLEVELAND BIOLABS INC

CBLI

Sold Out

-40.7%

CYTORI THERAPEUTICS INC

CYTX

Sold Out

-26.9%

DYAX CORP

DYAX

Sold Out

40.4%

HI TECH PHARMACAL CO INC

HITK

Sold Out

39.4%

M E L A SCIENCES INC

MELA

Sold Out

-15.9%

MAKO SURGICAL CORP

MAKO

Sold Out

36.5%

MANNKIND CORP

MNKD

Sold Out

12.1%

NEUROGESX INC

NGSX

Sold Out

-36.3%

PURE BIOSCIENCE

PURE

Sold Out

-25.0%

SEQUENOM INC

SQNM

Sold Out

25.1%

TEVA PHARMACEUTICAL INDS LTD

TEVA

Sold Out

1.9%

ZIMMER HOLDINGS INC

ZMH

Sold Out

11.9%

COVIDIEN PLC

COV

Sold Out

6.3%

SERVICE CORP INTERNATIONAL

SCI

1420

-82%

4.3%

REHABCARE GROUP INC

RHB

6838

-62%

1.9%

OBAGI MEDICAL PRODUCTS INC

OMPI

2977

-46%

-21.0%

C I G N A CORP

CI

4113

-38%

12.7%

GILEAD SCIENCES INC

GILD

7019

-36%

-1.7%

COVENTRY HEALTH CARE INC

CVH

4977

-22%

10.4%

WELLPOINT INC

WLP

17448

-12%

12.0%

AETNA INC NEW

AET

12567

-4%

17.2%

R T I BIOLOGICS INC

RTIX

3624

-3%

6.6%

HEALTHSOUTH CORP

HLS

3166

-1%

12.4%

BIOMARIN PHARMACEUTICAL INC

BMRN

5788

-1%

12.3%

ORCHID CELLMARK INC

ORCH

7886

0%

36.8%

HEALTH MANAGEMENT ASSOCIATES

HMA

5684

39%

4.6%

QUEST DIAGNOSTICS INC

DGX

4906

71%

1.4%

AMERICAN MEDICAL SYS HLDGS INC

AMMD

3982

New

38.4%

BIOTIME INC

BTX

449

New

-30.3%

CLEVELAND BIOLABS INC

CBLI

1629

New

-40.7%

EXPRESS SCRIPTS INC

ESRX

5798

New

7.1%

HCA HOLDINGS INC

HCA

8913

New

3.0%

MEDCO HEALTH SOLUTIONS INC

MHS

4825

New

6.6%

MEDICIS PHARMACEUTICAL CORP

MRX

4190

New

16.9%

SANOFI AVENTIS

SNY

9598

New

17.9%

Accipiter added six new securities to its portfolio during 1Q2011: American Medical System Holdings (NASDAQ:AMMD), Express Scripts (NASDAQ:ESRX), HCA Holdings Inc. (NYSE:HCA), Medco Health Solutions Inc. (NYSE:MHS), Medicis Pharmaceutical Inc. (MRX), and Sanofi Aventis (NYSE:SNY).

Accipiter’s largest purchase was Sanofi Aventis in which Accipiter bought 272,513 shares valued at approximately $9.6 million at the end of March. Sanofi has returned 17.9% since March 31st. Accipiter’s second largest new purchase is HCA Holdings with 263,151 shares valued at $8.9 million. HCA has returned 3% since then. Accipiter’s third largest new purchase is Express Scripts with 104,253 shares valued at $5.8 million as of the end of the first quarter. Express Scripts has returned 7.1% since March 31st. Stephen Mendel’s Lone Pine Capital and Larry Robbins’ Glenview Capital are two of the other major investors in ESRX which had approximately $542 million and $271 million invested at the end of March, respectively.

One other stock that catches our attention in Accipiter’s portfolio is Health Mgmt Associates (NYSE:HMA) where Accipiter added another 145,329 shares onto its existing holdings, bringing its position up to 521,485 shares valued at $5.7 million March-end. The stock has generated 4.6% return since then. Andreas Halvorsen’s Viking Global, Larry Robbins’ Glenview Capital, and Israel Englander’s Millenium Management also had large investments in HMA as of March 31st.

Wellpoint Inc. (WLP) still occupies the top spot in Accipiter’s portfolio with approximately $17.5 million in value at the end of March despite a trim off by Accipiter in the first quarter. Jeffrey Altman’s Owl Creek Asset Management , Alan Fournier’s Pennant Capital, and Jean-Marie Eveillard’s First Eagle also held significant positions in WLP as of March 31st. WLP has gained 12% since the end of March.

The stocks Accipiter sold generally underperformed the market and the stocks Accipiter held outperformed it. We believe investors could benefit a lot by following an d imitating Accipiter’s transactions.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Accipiter Capital's Most Favorite Stock Picks