Fund manager Hal Mintz of the $1.8 billion Sabby Capital fund has made some intriguing portfolio shifts in Q1, including slashing the fund’s CytRx Corporation (NASDAQ:CYTR) position but stocking up on MannKind Corporation (NASDAQ:MNKD). Based in New Jersey, the activist investment fund has seen its portfolio holdings increase by 1.08% this quarter. The fund has mainly healthcare stocks, in particular small-cap health stocks, and manages multiple fund series, including Sabby Healthcare Volatility Master Fund, and Sabby Volatility Warrant Master Fund.
New York investment banker Hal Mintz is the Principal and Managing Member at Sabby- a role he took after serving as a Managing Member at former employee-owned hedge fund sponsor BAM Capital, LLC.
In Q1, Mintz slashed the fund’s holding in oncology company CytRx from 4,697,802 to 989,600 shares, a whopping of -79%. However, in April, the hedge fund boosted its position in shares of the company to 10,400,000, a 951% increase.
At the end of April, CYTR announced that as a result of its meeting with the FDA in March, the company is going to begin a rolling submission of Aldox (a drug which delivers anti-cancer agents directly into the tumor) in the fourth quarter of this year. In particular, the company wants to get a broad label for soft tissue sarcoma (STS) under the New Drug Application (NDA) 505(b)(2) pathway.
The clarity provided by this update gave H.C. Wainwright analyst Andrew Fein the confidence to reiterate his buy rating on the stock with a $4.00 price target as the Aldox vale proposition has now been “rekindled”. Fein was pleasantly surprise by the company’s “clever” decision to pursue an NDA, which has been given the green light by the FDA and has a broader target label with no carve out. The stock is now trading at $0.67, slightly up from the $0.52 when Fein published his price target at the end of April.
We note that Fein has a solid track record with his recommendations. On TipRanks for example the analyst has a four-star rating due to his success rate of 48% and his average return of 7.8%.
Mintz initiated a new position in the biopharma MannKind with the purchase of 209,292 shares valued at $310,000. This is about 0.01% of the fund’s total portfolio holdings. California-based MannKind, find, develops and sells therapeutic products for patients with diseases such as diabetes.
Today, MannKind announced that it is looking to find new “strategic and financial” alternatives for its Technosphere-based pipeline candidates such as Palonosetron for chemotherapy-induced nausea and vomiting. Global advisory practice Locust Walk Capital is now helping MannKind find the necessary partners and investors to bring these product candidates to market.
Technosphere refers to a novel form of drug administration that is needle-free and quick to take effect. According to MannKind, the Technosphere-based therapies can be used in a wide variety of situations including hypertension, anaphylactic shock, nausea, respiratory disease and pain. The advantage is that this method reduces the risk of hepatic metabolism, while improving bioavailability.
MannKind says it wants to focus its resources on its FDA-approved Afrezza, a fast-acting insulin powder that can be inhaled rather than injected and can stay active for up to three hours.
According to TipRanks, 2 analysts rate MannKind stock a Sell. With a downside potential of 66%, the stock’s consensus target price stands at $0.54.