Caligan Partners Top 10 Holdings

In this article we will look at the Top 10 Holdings of Caligan Partners.

Founded in 2017, Caligan Partners is one of the largest specialty hedge funds. David Johnson is the founder of the New York-based hedge fund, which specializes in long-term activist equity investment strategies. It sometimes invests in distressed debt and investments with high absolute return profiles.

Caligan Partners focuses on investment opportunities in the healthcare sector, primarily in the United States. The sector currently dominates its holdings, representing 100% of its overall investment value. The firm also invests in long and short positions targeting equity opportunities in public healthcare companies.

The majority of the fund’s investments are in small-cap companies. These are stocks with a market capitalization of over $100 million, representing 8% of the total value of investments. Conversely, investments in large-cap stocks are minimal, representing just 0.1% of the total value. The average market capitalization of the fund’s portfolio companies is approximately $1.07 billion.

The current value of its portfolio is $378 million, with a turnover rate of 18%. Nevertheless, one of Caligan Partners’ top 10 holdings represents more than 40% of the hedge fund’s portfolio. The performance of the stocks purchased by Caligan Partners in three months has outperformed the S&P 500 over the same period four times out of 14 trades.

Additionally, Caligan Partners also engages in activist investing by pushing for strategic changes that can increase shareholder value. Management changes are among the changes the hedge fund advocates for in the companies it invests in, as it often lobbies for board seats that influence management decisions and company directions.

Caligan Partners is one of the hedge funds that contributed to the strong performance of activist investments in 2023. As activist investors pushed companies to change direction and streamline operations to increase shareholder value, they generated an average return of 20.2%.

Caligan Partners and other activist investors have gained more power to win board seats. Investors won 134 board seats in 2023, a 30% increase from the previous year and the highest number since 2018.

Activist investors also secured 36 positions in the final round of voting at the 2023 shareholders’ meetings, up 125% from the previous year and a record high. They also secured positions in 80% of the campaigns, up from 33% in 2022. In addition, the hedge fund is also urging companies to consider strategic alternatives such as divesting certain assets or selling shares for companies that have underperformed.

The fact that Caligan Partners’ top 10 holdings are in the healthcare sector is not surprising. The healthcare sector is often considered a defensive sector that tends to outperform in volatile markets like last year’s due to high interest rates. However, that was not the case, as the sector as a whole underperformed the S&P 500, which was up 24% at year-end.

The S&P 500 Healthcare Index has fallen about 0.4% in 2023. Healthcare stocks have fallen significantly as profits from the pandemic and vaccine rollouts have weakened. While companies that make medical devices may have faced a tougher outlook, those developing weight-loss drugs have seen much more positive results. The Federal Reserve’s strategy of raising interest rates and keeping them high for a long time is putting pressure on the healthcare sector.

The outlook for the sector also doesn’t look favorable, given that healthcare stocks are under pressure during election years as presidential candidates promise reforms to target drug prices and health insurance. Still, it’s possible that Caligan Partners could be one of the hedge funds that will benefit investors, given the depressed valuations of the healthcare sector. Sentiment among investors and healthcare industry experts is surprisingly upbeat. While many expect a moderate expansion and some sectors are in a better position than others, there is a widespread sense that the sector is on the verge of recovery.

Methodology

Caligan Partners is a leading hedge fund that focuses on healthcare stocks, which are often considered defensive stocks when the economy faces uncertainty. In this article, we look at Caligan Partners’ top 10 holdings and why they stand out by gaining exposure to healthcare stocks. We referenced Caligan Partners’ original 13F filing on the SEC website to determine the hedge fund’s stake in each stock. The stocks are ranked based on the hedge fund’s share value.

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The main holdings of Caligan Partners

10. Outlook Therapeutics Inc (NASDAQ:OTLK)

Caligan Partners’ stake: $5.97 million

Number of hedge fund holders: 9

Outlook Therapeutics Inc (NASDAQ:OTLK) summarizes Caligan Partners’ top 10 holdings as a clinical-stage biopharmaceutical company developing and commercializing antibodies for various ophthalmic indications. Although Outlook Therapeutics Inc (NASDAQ:OTLK) has been trading in a range for most of the year, its stock is up about 11%.

Earlier this year, Outlook Therapeutics Inc (NASDAQ: OTLK) received a signed contract from the FDA through a Special Protocol Agreement (SPA) for the NORSE EIGHT clinical study protocol investigating ONS-5010 in patients with neovascular age-related macular degeneration (AMD). The Company has also entered into securities purchase agreements with specified institutional and accredited investors for an aggregate amount of up to $172 million to support the development of ONS-5010.

In total, 9 hedge funds tracked by Insider Monkey database held stakes in Outlook Therapeutics Inc (NASDAQ:OTLK) in the first quarter of 2024, up from 4 in the previous quarter.

9. Y-mAbs Therapeutics, Inc. (NASDAQ: YMAB)

Caligan Partners’ stake: $9.55 million

Number of hedge fund holders: 11

Y-mAbs Therapeutics, Inc. (NASDAQ: YMAB) is a top 10 holding in Caligan Pharmaceuticals and one of the best performing stocks. It is a commercial-stage biopharmaceutical company that develops and commercializes antibody-based cancer therapies. Y-mAbs Therapeutics, Inc. (NASDAQ: YMAB) is already up over 70% for the year as it attempts to rebound from the implosion of the last two years.

The cancer treatment pharmaceutical company has named Peter Pfreundschuh as Chief Financial Officer. The appointment comes as Y-mAbs Therapeutics, Inc. (NASDAQ: YMAB) pushes for the U.S. launch of DANYELZA® and advances its leading-edge Self-Assembly DisAssembly Pretargeted Radioimmunotherapy (SADA-PRIT) technology platform.

At the end of the first quarter, 11 of the 920 hedge funds tracked by Insider Monkey held stakes in Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB).