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,