Many leading funds, including Abingworth, SAC Capital and Millennium Management, filed forms 13-D and 13-G (and form 4) with the SEC on Monday (April 16th, 2012), indicating that they had amended their ownership in U.S. traded public companies. The following are the most notable institutional trades based on our analysis of those filings (for more info on Forms 13-D and 13-G, and how to interpret that, please refer to the end of this article):
Amarin Corp. (AMRN): AMRN is a clinical stage Ireland-based global pharmaceutical group which develops novel drugs for the treatment of cardiovascular diseases using its proprietary advanced oral and trans-dermal drug delivery technologies. On Monday, London-based healthcare focused international investment group Abingworth LLP filed SEC Form SC 13D/A indicating that it holds 14.2 million or 10.4% of outstanding shares, an increase from the 7.9 million shares it held at the end of Q4. Earlier, we reported that last Friday, billionaire star fund manager Stephen Cohen's hedge fund SAC Capital Advisors filed SEC Form SC 13G indicating that it held 7.2 million or 5.2% of outstanding shares, an increase from the 5.4 million shares it reported in an earlier SC 13G filing on March 26th, and from the 3.4 million shares it held at the end of Q4.
AMRN shares are consolidating at their highs after spiking higher in the middle of March, prior to and just after the company announced last Tuesday that the USPTO (U.S. Patent and Trademark Office) published notification of a Notice of Allowance for its '598 patent for AMR-101, a prescription grade omega-3 fatty acid for the treatment of patients with very high triglyceride levels that are at increased risk for developing coronary artery disease. The issuance of the Notice of Allowance is a significant step toward the commercialization of AMR-101, and the street is rife with speculation of partnering possibilities, or even an outright acquisition at a stiff premium to current prices in the $11-$12 range. Furthermore, MKM partners last month reiterated its buy and $20 price target on AMRN.
Biodelivery Science International (BDSI): BDSI develops new formulations of proven therapeutics for pain, fungal infections and oncology supportive care, using its patented BioErodible MucoAdhesive (BEMA) and Bioral cochleate drug delivery technologies. On Monday, New York-based tech-focused hedge fund Sophrosyne Capital, investing in small-cap and micro-cap companies, filed SEC Form SC 13G indicating that it holds 1.9 million or 6.6% of outstanding shares, an increase from the 1.2 million shares it held at the end of Q4.
BDSI shares are surging today after the company announced that the U.S. PTO (Patent and Trademark Office) formally awarded BDSI's Patent No. 13/184306, that extends the patent protection of BDSI's BEMA products by seven years to 2027. The formal award triggered a $15 million payment from Endo Pharmaceuticals (ENDP), a significant impact given the company's market-cap in the $90 million range. Overall, ENDP shares are up to four-fold this year, a welcome change after a near crippling loss of about 75% in 2011. The rally started earlier in the first week of the year, on news that the company had signed a worldwide license and development agreement with ENDP for BEMA Buprenorphine, a move that triggered broker upgrades and further price appreciation.
OCZ Technology Group (OCZ): OCZ provides solid state drives (SSDs) used in high-performance storage and server systems. In addition, OCZ provides other high performance components for computing devices and systems, including thermal management solutions, AC/DC switching PSUs and computer gaming solutions. On Monday, billionaire star fund manager Stephen Cohen's hedge fund SAC Capital Advisors, with over $15.7 billion in 13-F assets, filed SEC Form SC 13G indicating that it holds 3.7 million or 5.5% of outstanding shares, an increase from the 1.1 million shares it held at the end of Q4.
OCZ is scheduled to soon release its Q4 (ending February) report on May 1 after the market close. In the latest Q3 report, it missed analyst earnings estimates (6c v/s 7c) and beat on revenues ($103.1 million vs. $100.3 million), while guiding Q4 revenues above consensus. Its shares currently trade at 2.5 P/B and 1.0 PSR (price-to-sales ratio) compared to averages of 2.2 and 1.6 for its peers in the computer storage devices group.
Other major institutional filings on Monday included:
- Basic Energy Services (BAS), a provider of well-site services to over 2,000 oil and gas drilling and production companies, in which Millennium Management LLC filed SEC Form SC 13G indicating that it held 2.4 million or 5.6% of outstanding shares, an increase from the 1.4 million shares it held at the end of Q4, and from the 2.0 million shares it indicated holding in an earlier filing at the end of March;
- MedAssets Inc. (MDAS), a provider of revenue cycle and spend management software for hospitals and other healthcare provides, in which SAC Capital Advisors filed SEC Form SC 13G indicating that it held 3.2 million or 5.6% of outstanding shares, an increase from the 29,669 shares it held at the end of Q4; and
- DURECT Corp. (DRRX), a specialty pharmaceutical company, developing pharmaceutical products and therapies based on its proprietary drug formulations and delivery platform technologies, in which micro-cap healthcare-sector focused Conus Partners filed SEC Form SC 13G indicating that it held 4.4 million or 5.0% of outstanding shares, an increase from the 1.2 million shares it held at the end of Q3.
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 10 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 18 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, Zacks Investment Research, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclaimer: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our "opinions" and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.