Here's The Hedge Funds Potentially Getting Killed By Gilead and Johnson & Johnson's Tumble

After a pretty good year, Gilead Sciences, Inc.’s GILD stock is trending on Twitter, and down more than 5 percent on Tuesday -- and about 16 percent since the start of the week. The tumble was set in motion after Express Scripts Holding Company ESRX, the largest pharmacy benefits manager in the US, selected AbbVie ABBV, over Gilead and Johnson & Johnson JNJ, for its hepatitis C drug.

 

Related Link: AbbVie Takes A Bite Out Of Gilead Sciences' Hepatitis C Market Share

 

In this article we will find out which hedge funds are taking a big hit as Gilead and some of its peers fall this week.

 

Egerton Capital

 

This London-based firm, managed by John Armitage, is the largest hedge fund investor of record in Gilead, with 5.69 million shares. Since Friday, the fund’s position lost more than $100 million in market value, and is now worth slightly more than half a billion dollars.

Despite the big loss, Bank of America analysts seem to believe that there is still some downside left. The research firm downgraded Gilead from Buy to Underperform on Monday, and trimmed its price target from $130 to $87 -the stock currently trades around $88.40- on the back of a possible pricing war.

 

Orbimed Advisors

 

Healthcare-oriented fund Orbimed Advisors, run by Samuel Isaly, also took a big blow, as its largest bet is placed on Gilead. The fund last disclosed, by the end of the third quarter of 2014, ownership of 3.76 million shares. These shares lost about $65 million in value between last Friday and Tuesday.

Orbimed’s second-largest stake is placed in Biogen Idec Inc. BIIB, another biotech company that’s been loosing ground this week, and fell more than 6 percent on Tuesday. The fund’s 1.19 million shares (last declared as of September 30, 2014) lost about $28 million in value since Friday, magnifying the impact of Gilead’s fall for Orbimed.

 

Adage Capital Management and AQR Capital Management


Although Johnson & Johnson did not take a blow as big as Gilead, its stock also plummeted more than 2 percent on Tuesday. Adage and AQR are two funds with big investments in both Gilead and Johnson & Johnson, and thus, really felt the impact of the hepatitis C news.

Adage owns 2.96 million shares of Johnson & Johnson and 3 million shares of Gilead, while AQR holds 3.49 million, and 2.26 million, respectively.

Once again, as you might figure, the losses have been huge.

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Posted In: NewsDowngradesHedge FundsAnalyst RatingsMoversTrading IdeasGeneralAdage Capital ManagementAQR Capital ManagementBank of AmericaEgerton CapitalJohn ArmitageOrbimed AdvisorsSamuel Isaly
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