Many leading funds, including Carl Icahn, Elliott Associates, and biotech-focused hedge fund Perceptive Advisors, filed forms 13-D and 13-G (and form 4) with the SEC last week (May 21st to 25th, 2012), indicating that they had amended their ownership in U.S. traded public companies. Based on our analysis, the following are the more noteworthy filings (for more info on Forms 13-D and 13-G, and how to interpret that, please refer to the end of this article):
Repros Therapeutics Inc. (RPRX): RPRX is a clinical-stage biotech company engaged in the development of small molecule drugs to treat hormonal and reproductive system disorders. On Wednesday, New York-based biotech-focused hedge fund Perceptive Advisors filed SEC Form SC 13G/A indicating that it holds 2.86 million or 19.3% of outstanding shares, an increase from the 2.63 million shares that it indicated holding in a prior SEC Form 4 filing earlier this month, and also an increase from the 2.31 million shares it held at the end of Q1. With this purchase, Perceptive Advisors remains the largest institutional investor in RPRX.
RPRX shares have been surging recently, up about 120% in the past twelve trading sessions, after the company announced on May 9th that it had reached an agreement with the FDA finalizing the phase 3 trial design of its Androxal registration program. The shares had been consolidating gains after the near 100% run-up on May 10th and 11th, but received a further boost after the company announced on Tuesday, that it had modified the pivotal protocol following additional input from the FDA, and that it believed that the protocol modification improved its chances of a first pass success.
Androxal is one of two key products in RPRX's pipeline, the other being Proellux, for the treatment of uterine fibroids. The Androxal treatment targets men with secondary hypogonadism resulting in low levels of testosterone, with the secondary nomenclature implying that the defect or problem is in the brain, whereas in primary hypogonadism the problem is in the testicles. The potential market for secondary hypogonadism is believed to be huge as it is believed to be responsible for large majority of the incidences of low testosterone in the U.S.
Additional major 5% institutional ownership filings last week included:
- BMC Software Inc. (BMC), that provides software to the largest global corporations and the smallest businesses in over 120 countries to manage their business services and applications across distributed, mainframe, virtual and cloud environments, in which legendary hedge fund manager Paul Singer's Elliott Management Corp., with more than $20 billion in assets under management, filed SEC Form SC 13D/A indicating that it holds 10.40 million or 6.5% of outstanding shares of the company, an increase from the 5.5 million shares it indicated holding in an earlier SC 13D filing this month, and also an increase from the 0.20 million shares it held at the end of Q1;
- Chesapeake Energy (CHK), an independent oil and gas company, with its primary operating assets in mid-continent region of Oklahoma, western Arkansas, southwestern Kansas and the Texas panhandle, in which well-known financier, corporate raider and 'activist' hedge fund manager Carl Icahn's eponymous fund filed SEC Form SC 13D indicating that it holds 50.09 million or 7.6% of outstanding shares, a new position for it since the end of Q1;
- Broadband wireless network services provider Clearwire Corp. (CLWR), in which Sirios Capital Management filed SEC Form SC 13G/A indicating that it holds 32.82 million shares, an increase from the 11.99 million shares it held at the end of Q1; and
- Valeant Pharmaceuticals (VRX): VRX develops primarily branded drugs to treat central nervous system disorders, pain and cardiovascular disease, in which San Francisco-based shareholder activist-oriented hedge fund ValueAct Capital Management, with $6.46 billion in 13-F assets at the end of Q1, filed SEC Form SC 13D/A indicating that it holds 16.73 million or 5.5% of outstanding shares, an increase from the 15.1 million shares it held at the end of Q1.
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 and company descriptions are based on SEC filings, Zacks Investment Research, Yahoo, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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