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,...

ISSN: 2151-1845 / CDC10004H

TAKE A FREE TRIAL

The full contents of this article are available to Absolute Return subscribers and trialists only.

To continue reading please, take a free trial, subscribe or log in.


Subscribe

Subscribers have unlimited access to all current and archive content. Start your subscription today - click on the button below.

Subscribe now