SAC’s Intercept Gain Reaches Almost $370 Million in Two-Day Jump

Jan 10, 2014 4:19 pm ET

Jan. 10 (Bloomberg) -- Steven Cohen’s SAC Capital Advisors LP saw its shares of Intercept Pharmaceuticals Inc. climb almost $170 million today, bringing its two-day gain to almost $370 million if the stake is unchanged.

SAC, which is shutting down its investment advisory business after pleading guilty to securities fraud, owned almost 1 million shares of the biotechnology company as of Nov. 7, according to data compiled by Bloomberg.

Intercept rose 62 percent to close at $445.83 in New York after soaring 281 percent yesterday following a successful liver drug trial. The stock got another lift today when Bank of America Corp. analyst Rachel McMinn raised her price target to $872 from $81, without specifying a time frame, saying the market for treating nonalcoholic steatohepatitis has the potential to be “as big or bigger than Hepatitis C.”

Intercept, which is based in New York, said yesterday that a trial of its liver disease drug worked well enough for the testing to be stopped. Biotechnology and pharmaceutical companies can post big gains or losses depending on trial outcomes, making them a popular target for investors seeking quick profits.

Cohen’s firm first bought Intercept in the second quarter, regulatory filings show. It raised its holdings in the third quarter and again after Sept. 30.

OrbiMed, Fidelity

SAC, which is based in Stamford, Connecticut, in November agreed to pay a record $1.8 billion and shutter its investment advisory business to settle allegations of insider trading. Mathew Martoma, a former money manager at SAC, is on trial facing U.S. government allegations of using illegal inside information to trade health-care stocks, Wyeth and Elan Corp. Trading in the shares resulted in gains for SAC of $276 million, the government has said.

SAC owned 5.1 percent of Intercept as of Nov. 7. OrbiMed Advisors LLC, a New York firm that invests exclusively in health care, owned 9 percent of the shares as of Nov. 9. Boston-based Fidelity Investments, the second-largest U.S. mutual fund firm, owned 12 percent as of Sept. 30.

Jonathan Gasthalter, a spokesman for SAC, declined to comment on the Intercept position in an e-mail.

--Editors: Josh Friedman, Christian Baumgaertel