Many leading funds filed forms 13-D and 13-G (and form 4) on healthcare sector stocks with the SEC last week, including Baillie Gifford and Highland Capital Management, indicating that they had amended their ownership in U.S. traded public companies. The forms are required to be filed within ten days, so the institutions traded these shares sometime at or after the end of last year. Also, we have included, when applicable, SEC Form 4 filings by Institutions that are considered corporate insiders by virtue of their holding more than 10% ownership, and in many cases having representation on the Board of Directors. The following are the most notable filings in the healthcare sector last week (for more info on Forms 13-D and 13-G, and how to interpret that, please refer to the end of this article):
Alexza Pharmaceuticals (NASDAQ:ALXA): ALXA is a development stage biotech company, focused on the research, development and commercialization of a novel proprietary drug delivery system for the acute treatment of central nervous system conditions. On Friday, London-based Occitan Capital Partners LLP filed SEC Form SC 13G/A indicating that it holds 7.1 million or 9.9% of outstanding shares. This is an increase from the 3.3 million shares that Occitan reported holding in an earlier 13G filing last month, on December 23rd. ALXA shares have been weak recently and currently trading within striking distance of its all-time lows. The company announced on December 16th 60-day layoff notices to all of its employees and indicated that it was exploring strategic options, including a possible sale or disposition of one or more corporate assets, a strategic business combination, partnership or other transactions. Also, shares are weaker today after the FDA announced that it needs an additional three months to complete its review, moving the PDUFA date for the ADASUVE NDA from February 4 to May 4, 2012.
Incyte Corporation (NASDAQ:INCY): INCY develops small molecule drugs for hematologic and oncology indications, and inflammatory and autoimmune diseases. On Tuesday, New York-based biotech-focused hedge fund Baker Bros. Life Sciences Capital, with over $2.3 billion in equity assets per its latest 13-F Q3 filing, filed SEC Form 4 indicating that it now holds 12.4 million shares, after purchasing 0.54 million shares for $8.9 million. This is an increase from the 11.1 million shares that Baker Bros. reported owning at the end of Q3 per its 13-F filing, and from the 11.9 million shares it reported in an earlier SEC filing on December 12th. Also, on Tuesday, 14159 Capital controlled by brothers Julian and Felix Baker of Baker Bros., filed SEC form 4 indicating that it purchased 14,625 shares for $0.24 million, increasing its holding to 0.36 million shares.
Diadexus Inc. (OTCQB:DDXS): DDXS is engaged in the development and commercialization of in-vitro diagnostic products for the treatment of cardiovascular disease. On Friday, New York-based biotech-focused hedge fund Baker Bros. Life Sciences Capital, with over $2.3 billion in equity assets per its latest 13-F Q3 filing, filed SEC Form 4 indicating that it sold 138,800 shares for $29,185, ending with 59,340 shares. The stock received a boost recently, when on January 9th the company pre-announced Q4 revenues of approximately $4.9 million, up from $3.3 million year-over-year and from $4.4 million in the prior quarter, and it also guided 2012 total revenue at $20-21 million.
Complete Genomics Inc. (NASDAQ:GNOM): GNOM is a life sciences company that is engaged in the development and commercialization of an innovative DNA sequencing platform that can provide customers with data that is ready to be used for genome-based research. On Tuesday, Dallas, TX-based Highland Capital Management LP, with $759 million in equity assets per its latest 13-F Q3 filing, filed SEC Form SC 13G indicating that it holds 2.745 million or 8.2% of outstanding shares, an increase of 27,927 shares from the 2.717 million shares it reported holding at the end of Q3. GNOM shares have been among the weakest in the healthcare sector, down 70% in the past year and currently trading at all-time lows. The shares have been almost cut in half after the company announced on January 9th that it delivered 600 genomes to its customers in Q4, 300 fewer than the approximately 900 that it had projected earlier.
Intuitive Surgical Inc. (NASDAQ:ISRG): ISRG, a pioneer in the field of surgical robotics, is the developer of the da Vinci Surgical System designed to aid surgeons in conducting minimally-invasive surgery by offering surgeons superior 3D HD visualization, enhanced dexterity, and greater precision and ergonomic comfort. On Tuesday, Edinburgh-based esteemed investment management firm Baillie Gifford, with over $100 billion in assets under management, including $22.2 billion in U.S. equity assets per its latest 13-F Q3 filing, filed SEC Form SC 13G/A indicating that it holds 2.452 million or 6.3% of outstanding shares, a decrease of 63,219 shares from the 2.515 million shares it reported at the end of Q3. ISRG has been a great long-term performer, up five-fold from the 2008/09 lows and up over 25-fold in the last seven-plus years; its shares trade at 26-27 forward P/E and 6.6 P/B compared to averages of 26.0 and 5.4 for its peers in the medical instruments group, while earnings are projected to rise at a strong 16.5% annual rate from $12.32 in 2011 to $16.71 in 2013.
Form 13-D is commonly referred to as "beneficial ownership report," and is required when a person or a group of persons acquires beneficial ownership of more than 5% of the voting class of a company's equity securities; form 13-G is the abbreviated version of the form that is allowed under certain circumstances.
The information in forms 13-D and 13-G is extremely timely as it is required to be filed within ten days after the purchase, in contrast to 13-F quarterly filings by Institutions that are filed every three months. The information contained in 13-F filings, thereby, can as much as eighteen weeks old by the time it is disseminated to the public. Furthermore, by virtue of their 5% ownership in public companies, the information contained in the 13-D and 13-G filings indicates only high confidence or high conviction moves by institutions and insiders, and hence can be interpreted to be of greater relevance to the investment community than the 13-F quarterly filings. Furthermore, 13-D and 13-G filings often are a precursor to hostile takeover, company breakups and other "change of control" events, and often they will include a letter to management explaining the reason for their taking a large stake in the company.
Credit: Fundamental data in this article were based on SEC filings, I-Metrix® by Edgar Online®, Zacks Investment Research, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
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