Hedge funds sold Moderna, BioNtech shares before vaccine news

FAN Editor

November 19, 2020

By Svea Herbst-Bayliss

BOSTON (Reuters) – A number of hedge funds sold positions in two drug companies leading the race to a coronavirus vaccine in the quarter before both announced breakthroughs that lifted their stock prices, while a few took stakes in the companies during that time.

Regulatory filings show that hedge funds sold millions of shares in drugmakers Moderna and BioNtech during the third quarter, missing out on big gains this month when each announced their vaccines are more than 94% effective.

Since the end of the third quarter BioNtech’s stock has jumped another 26% and Moderna’s stock has climbed 28%, adding to triple-digit percentage gains and putting them among the biggest winners this year, during which the S&P 500 has rebounded 60% from its March lows.

By the end of September, Balyasny Asset Management, Adage Capital Partners and Verition Fund Management had liquidated their positions in Moderna while Healthcor Management, Logos Global Management and Duquesne Family Office exited positions in BioNtech, according to regulatory filings and data from research firm Symmetric.io.

Redmile Group, BioNtech’s largest hedge fund investor, slashed its holdings by 59% during the quarter and Theleme Partners, Moderna’s largest hedge fund investor, cut its exposure by 11%, regulatory filings show.

Additionally, Millennium Management, Myriad Asset Management and Citadel cut holdings in Moderna while Citadel, Balyasny and Schonfeld Strategic Advisors cut holdings in BioNtech, the filings show.

Symmetric.io data show that hedge funds owned 3.4 million shares of BioNtech, a German company which partnered with Pfizer to bring its vaccine to market, at the end of the quarter, 1.9 million shares less than at the start of the quarter. At Moderna, hedge funds owned 11.7 million shares at the end of the quarter, down 2.2 million shares from the start.

Moderna’s stock price surged 376% since January while BioNtech’s rose 157%, handily beating the S&P 500 index which is up 12%, having bounced back from deep losses earlier in 2020.

Representatives for the funds either declined to comment or did not respond to requests for comment on what prompted their sales. Investors who put money into hedge funds, including some of those mentioned in the article, said some fund managers had started locking in profits ahead of U.S. elections on worries over potential market volatility stemming from the Nov. 3 vote.

The average hedge fund gained 1.2% through October, while healthcare focused funds, on average, rose 13%, Hedge Fund Research data show.

Even as certain hedge funds took money away from Moderna and BioNtech the two companies did attract new hedge fund investors during the quarter, the data show.

Voloridge Investment Management and LMR Partners initiated new positions in Moderna while Armistice Capital and Adage Capital put on new positions in BioNtech. And Millennium boosted its investment in BioNtech while D.E.Shaw increased its holding in Moderna, the filings show.

(Reporting by Svea Herbst-Bayliss; editing by Ira Iosebashvili and David Gregorio)

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