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Biotech Roadmap in 2021 Has Led to Some Huge Hedge Fund Losses

Biotech stocks have plummeted in 2021 after soaring last year amid excitement over the development of a COVID-19 vaccine, taking a toll on some hedge funds.

The sector is being countered by concerns Congress will move to cover up drug pricing and the rise of early-stage biotech stocks like IPO market boom.

Percept Advisors, a popular biotech hedge fund that manages about $9 billion, has lost about 30% this year through November in its main fund, investors say, investors say. know. A hedge fund managed by OrbiMed Partners, which invests more than $18 billion in healthcare in the public and private markets, has lost more than 40% in the year to November, people familiar with the matter said. fund said. Both funds have made great returns over the past two years.

Meanwhile, a hedge fund run by San Francisco-based Logos Capital, which manages about $1.4 billion, is down more than 25% over the period, others said. The cormorant asset manager lost 10% in November alone, adding to its double-digit loss earlier in the year.

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

An expanded version of this report appears on WSJ.com.

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