Hedge funds betting on drugs stocks have made bumper profits this year, as a recent wave of deals by big pharmaceutical companies drives the biggest rally in the biotechnology sector in a decade.
New York-based investment manager Perceptive Advisors has seen its flagship $4.5bn hedge fund soar 75 per cent this year to the end of November, according to people who had seen the numbers. Meanwhile, Caligan Partners, another New York-based hedge fund, which manages more than $1bn, was up 92 per cent, its best year since inception in 2022.
The gains come as the Nasdaq Biotechnology index has soared by about one-third, its strongest year since 2014. It has been helped by a renewed surge in dealmaking as big groups looking for their next blockbuster drug spend billions of dollars on biotech companies at the forefront of innovation.