hedge funds reduce life science investments but remain on record pace

The hedge fund activity in the biopharma and life sciences sectors has slowed down in the third quarter of the year. However, hedge fund firms with dedicated venture capital funds are still on track to achieve their highest annual deal counts since the market peaks of 2021 and 2022.

RA Capital Management

RA Capital Management remains a prominent player in this sector, despite a significant reduction in the number of new investments. While RA Capital made nine new investments in the third quarter, compared to 22 in the previous quarter and 27 in the first quarter, its year-to-date total of 58 deals surpasses its private investments completed in 2023 and 2022. However, it still falls behind the 82 deals executed in 2021.

Notable investments by RA Capital include leading a $175 million Series B financing round for Aktis Oncology and spearheading a $120 million Series A round for Superluminal Medicines.

Perceptive Advisors

Perceptive Advisors has also experienced a downturn in investment activity, completing only five new deals in the third quarter. Despite this, Perceptive Advisors has made a total of 36 deals this year, surpassing its investments in 2023 and 2022.

RTW Investments and Cormorant Asset Management

RTW Investments and Cormorant Asset Management have seen a decrease in investment activity, while Cormorant Asset Management has increased its investment activity.

The future of hedge fund investments in life sciences remains dynamic, with some firms scaling back their activities and others seizing opportunities to invest in promising companies. The contrasting strategies among hedge funds highlight the varying approaches to risk and opportunity in the biopharma sector.

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