Here's Why Point72's Steve Cohen's Bought Millions Worth of Biotech Stocks Last Week

New York Mets owner and billionaire investor Steven A. Cohen is known for his agility and high-risk/reward investing approach. Cohen founded the now-defunct SAC Capital Advisors, which was among the most successful hedge funds. However, the fund was charged with insider trading charges and repaid investors $1.8 billion (£1.3 billion) in penalties as Cohen faced a two-year ban on managing investor money.

In 2013, Cohen converted his investment operations into a family office and formally adopted the Point72 Asset Management name the following year. In 2018, the firm became a registered investment advisor and started accepting outside capital.

Cohen, who has a net worth of $23 billion (£16.8 billion), recently invested heavily in two biopharma companies, and one of them is a new addition to Point72's portfolio.

The hedge fund manager ramped his stake in Dianthus Therapeutics (Nasdaq: DNTH) by over 50% to own a total of 2.1 million shares of the company, according to a 12th September filing with the US Securities and Exchange Commission. His investments in the biotech stock are now worth $78.6 million (£57.6 million) as of the latest closing price of $37.47 (£27.45). The stock gained over 80% in the past month, and witnessed a sharp rally when it announced positive topline data from its phase 2 MaGic trial on 8th September. The data revealed that Claseprubart achieved statistically significant and clinically meaningful improvements in adults with generalised Myasthenia Gravis, a chronic, autoimmune neuromuscular disease. The stock continued to surge as the company soon after closed an upsized public equity offering of almost $251 million (£183.8 million) via common shares and pre-funded warrants.

All analysts polled by TipRanks had a buy rating on the stock with an average price target of $64.33 (£47.12) per share, with the highest price target reaching $100 (£73.20).

Cohen's latest addition to the Point72 portfolio was Kala Bio (Nasdaq: KALA), a clinical-stage biopharma company. The 9th September SEC filing shows that the hedge fund purchased 469,229 shares of the company, worth over $8.5 million (£6.2 million) based on the latest closing price of $18.32 (£13.42). The stock price surged by over 120% in the past month, soon after it posted its Q2 results.

On 8th August, the company reported fiscal Q2 results, which showed that it has considerably narrowed its loss per diluted share to $1.71 (£1.25) from a loss of $3.16 (£2.31) in the prior year quarter. Moreover, the company made a crucial announcement in the earnings release. It completed patient enrollment for its phase 2b CHASE trial of KPI-012 to treat Persistent Corneal Epithelial Defect. Kala Bio expects topline data at the end of September.

The company's cash and cash equivalents were $31.9 million (£23.3 million) as of 30th June, which is lower compared with the prior-year quarter. Kala Bio attributed the drop to cash used to fund operations and a prepayment of $2.5 million (£1.8 million) of a debt facility. It expects the cash resources to fund operations into Q1 2026. Analysts polled by TipRanks had a buy rating on the stock with an average price target of $20.40 (£14.94) per share.

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