Life Sciences Hedge Funds Experience Losses in April Amid Market Downturn

Life sciences hedge funds hit a rough patch last month, snapping their winning streak as many saw significant losses in April. The market downturn was particularly harsh on funds heavily invested in fledgling biotech companies with little to no revenues.

One of the biggest losers in April was EcoR1 Capital, which dropped 14 percent and is now down 12.8 percent for the year. The fund’s top holdings, including Apellis Pharmaceuticals and Prothena Corp, experienced sharp declines of 25 percent and nearly 18 percent, respectively.

Affinity Asset Advisors also took a hit, dropping 11 percent in April and cutting its year-to-date gain to 16 percent. Madrigal Pharmaceuticals, a significant holding for the fund, plummeted by 24 percent last month.

Redmile Group lost 10.7 percent in April, with top holdings Krystal Biotech and Amicus Therapeutics falling more than 11 percent and nearly 13 percent, respectively. RTW Investments and Rocket Pharmaceuticals, another fund hit hard in April, saw losses of about 10 percent and nearly 14 percent, respectively.

Despite the widespread losses, some funds managed to stay in the black for the year. Avoro Capital Advisors, Soleus Capital, Casdin Capital, and Cormorant Asset Management all posted smaller losses in April but remain up for the year.

RA Capital Management fell less than 4 percent in April but is still up 9 percent for the year. Averill Partners, known for its shorting prowess, was down just 1 percent in April and remains up 9.7 percent for the year.

Overall, the life sciences hedge fund sector faced a challenging month in April, with many funds struggling to maintain their earlier gains. Investors will be closely watching how these funds navigate the volatile market conditions in the coming months.