Investing in Biotech: Redmile Group's Q3 2022 vs. Q4 2022 13F Holdings Comparison

The biotech industry is known for its promising innovations, high volatility, and intricate regulatory framework. For investors, identifying the right companies and timing the market can be a daunting task. However, it is also a sector that has the potential to generate significant returns. One way investors can gain exposure to the biotech industry is through mutual funds. Redmile Group, LLC is a well-respected hedge fund that focuses on the healthcare industry, including biotech. In this blog post, we will analyze Redmile Group's Q3 2022 vs. Q4 2022 13F holdings comparison to gain insights into the fund's investment strategy and determine what changes occurred in its holdings during these quarters.

Redmile Group, LLC Q3 2022 vs. Q4 2022 13F Holdings Comparison

In Q3 2022, Redmile Group, LLC's portfolio was valued at $9.37 billion, with 219 stocks held. In Q4 2022, the fund's portfolio value decreased to $8.43 billion, with 209 stocks held. Redmile Group decreased its holdings in 49 companies and increased its holdings in 27 companies while initiating positions in 8 new companies.

The largest holding in Q3 2022 and Q4 2022 was Amicus Therapeutics Inc (FOLD). In Q3 2022, the fund held 21,719,191 shares of the company, worth $226.75 million, while in Q4 2022, the fund held 20,249,789 shares, worth $247.25 million. This represents a decrease of 6.8% in the number of shares held.

The second-largest holding in Q3 2022 and Q4 2022 was Krystal Biotech Inc (KRYS). In Q3 2022, the fund held 1,899,545 shares of the company, worth $13.24 million, while in Q4 2022, the fund held 1,896,645 shares, worth $15.03 million. This represents a decrease of 0.2% in the number of shares held.

The third-largest holding in Q3 2022 and Q4 2022 was Akero Therapeutics Inc (AKRO). In Q3 2022, the fund held 1,591,085 shares of the company, worth $54.18 million, while in Q4 2022, the fund held 2,632,912 shares, worth $144.28 million. This represents an increase of 65.2% in the number of shares held.

The fourth-largest holding in Q3 2022 and Q4 2022 was Replimune Group Inc (REPL). In Q3 2022, the fund held 3,645,309 shares of the company, worth $62.95 million, while in Q4 2022, the fund held 4,831,709 shares, worth $131.42 million. This represents an increase of 32.5% in the number of shares held.

The fifth-largest holding in Q3 2022 was Fate Therapeutics Inc (FATE), and it was the fifth-largest holding in Q4 2022 as well. In Q3 2022, the fund held 12,957,222 shares of the company, worth $290.37 million, while in Q4 2022, the fund held 12,957,222 shares, worth $130.74 million. This represents a decrease of 55% in the number of shares held.

Analysis of Changes in Holdings

One of the new positions that Redmile Group initiated in Q4 2022 was Zymeworks Del Inc (ZYME). The fund held 6,175,918 shares of the company, worth $48.54 million. Zymeworks is a clinical-stage biotech company that focuses on developing multifunctional biotherapeutics for the treatment of cancer, autoimmune, and inflammatory diseases. This new addition reflects the fund's growing interest in the biotech sector and its focus on targeted treatments.

Another noteworthy change in the fund's holdings was its significant reduction of 61.4% in MedAvail Holdings Inc's (MDVL) shares. In Q3 2022, Redmile Group held 34,604,516 shares of the company, worth $26.85 million, while in Q4 2022, the fund held 34,604,516 shares, worth $10.37 million. MedAvail provides an autonomous pharmacy platform that enables patients to receive their medications at the point of care. This decrease in holdings may suggest that the fund is less bullish on the stock or that it has reevaluated the carrying value of its holdings.

Conclusion

Redmile Group, LLC holds a diversified portfolio of healthcare companies, including biotech. The fund's Q3 2022 vs. Q4 2022 13F holdings comparison showed that the fund entered new positions and reduced holdings in certain companies. By analyzing the changes in the fund's holdings, investors can gain valuable insights into the fund's strategy and make informed investment decisions. However, it is important to note that past performance is not indicative of future results, and investors should always conduct their own due diligence before making any investment decisions.