Yesterday, we got confirmation yet again in the ability of Arctic Aurora Life Science to find companies with innovative and successful product development. With in-depth knowledge of the biotechnology sector, the portfolio managers are able find companies in route for merge or acquisition by larger biotech companies. Last week with the case of Vitae Inc. Now with the case of Array.
Yesterday, Array Biopharma (ARRY), informed financial markets about very positive Phase 3 data. The result levers the stock into a takeover candidate in the sector and the equity share rose 81% on the news. The company currently has no products on the market, something that is expected to change in the near future along with a very interesting and promising pipeline in its research portfolio. The company has been shown little interest from the stock market up until this point, and with a market cap below MUSD 600 and is defined as "Emerging Biotech" in our sector division.
- We have looked at the company for a while, and with positive test results, and little movement in the stock, we utilized the opportunity to ease into a very exciting oncology company, says Ulrica Bjerke, former portfolio manager at Swedish AP3 funds, now part of the Arctic team.
Emerging Biotech companies in general are an important part of Arctic Aurora Life Science capability to provide overall excess return. As former scientists, with many years in the industry, the portfolio managers of the fund have the competence and theft to recognize positive test results when they see them - something that was done in the case of Array. Along with the fact that the share has been overlooked in the stock market paved the way for a very attractive entry value of the stock into the portfolio before yesterday's successful Phase 3 trials.
Before the news yesterday, Array Biopharma amounted to ca. 1% of the portfolio which increased to 1.7% due to the favorable rise. The news also leads to increased attention from the market that may take the stock even further. The fund is up 6 - 8 % YTD dependent on the share class.
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