Biotech rout in 2021 has led to some large hedge-fund losses


Biotech stocks fell to the earth in one fell swoop in 2021 after skyrocketing amidst excitement over COVID-19 vaccine development last year and inflicting huge losses on some hedge funds.

The sector is grappling with concerns that Congress will contain drug prices and an early-stage excess of biotech stocks in the wake of the IPO boom.

Perceptive Advisors, a well-known biotech hedge fund that manages about $ 9 billion, has lost about 30% of its main fund through November this year, investors say. A hedge fund managed by OrbiMed Partners that invests more than $ 18 billion in healthcare in public and private markets has lost more than 40% this year through November, say people familiar with the fund. Both funds had made big gains over the past two years.

Meanwhile, a hedge fund operated by San Francisco-based Logos Capital that manages approximately $ 1.4 billion fell more than 25% over the reporting period, others say. Cormorant Asset Management lost 10% in November alone, adding to double-digit losses at the beginning of the year.

“It’s been a very challenging year,” said Bihua Chen, founder of Cormorant, which focuses on smaller biotech companies.

An expanded version of this report appears on

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