Hedge funds hemorrhage on InterMune
By Suzy Kenly Waite
Fri Aug 20, 2010
A drug company with modern treatments may have given a group of hedge funds something akin to a medieval barber’s cure, as portfolios bled from the loss of FDA approval.
SAC Capital loaded up on shares of InterMune, a
pharmaceutical company, when it looked like the company's hotly
anticipated new drug would get approval from the Food and Drug
Administration. But after the approval did not come through and
the stock plunged 80% in one day, the prognosis for that
investment does not look good.
SAC Capital was not alone, with several other big-name hedge
funds, including Citadel Investment Group, D.E. Shaw and
Millennium Management, holding shares in InterMune, a
biopharmaceutical company that develops drugs for pulmonary and
liver diseases. If the company's new drug, Pirfenidone, had
gotten approval, it would have been the first drug to cure
idiopathic pulmonary fibrosis,...
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