Balyasny Asset Management Ramps Up InterMune (ITMN) Position ~ market folly

Tuesday, June 29, 2010

Balyasny Asset Management Ramps Up InterMune (ITMN) Position

Due to activity on June 17th, 2010, Balyasny Asset Management has disclosed an updated stake in InterMune (ITMN). Dmitry Balyasny's hedge fund firm now shows a 5.49% ownership stake in ITMN with 3,040,200 shares. This is a massive increase in their position size because back on March 31st, 2010, Balyasny owned only 350,000 shares of InterMune. This means that somewhere over the course of the past three months, the hedge fund firm has added 2,690,200 additional shares (over a 768% increase in their position size).

It's impossible for us to know when exactly Balyasny Asset Management purchased their shares. This information becomes crucial, however, when you consider that InterMune precipitously dropped from $45 to around $12 back in early May. This huge decline was mainly due to InterMune's failure to receive FDA approval for one of their lung drugs. This is a stock we've seen owned by some other prominent hedge funds in our coverage. Back in early April, we noted Steven Cohen's SAC Capital disclosed an ITMN position. And previously, we detailed how Andreas Halvorsen's Viking Global started a new position in InterMune back in the first quarter.

Given the circumstances with this stock and the fact that these big-time hedgies owned shares before the FDA rejection, it's very hard to say whether or not SAC and Viking still own these positions. It's even more difficult to hazard such a guess pertaining to SAC Capital's ownership given that they are a trading oriented firm and move in and out of positions at a much more frequent rate compared to most funds. One thing is clear though: Dmitry Balyasny's hedge fund firm now owns a sizable stake in ITMN. We haven't seen much new portfolio activity out of Balyasny as of late, but we did touch on a newly disclosed position of theirs a few months ago.

Taken from Google Finance, InterMune "is a biotech company focused on developing and commercializing therapies in pulmonology and hepatology. In November 2008, InterMune together with Roche and Pharmasset, Inc. (Pharmasset) announced the initiation of INFORM-1, a dual combination clinical trial investigating the combination of two oral antiviral molecules in the absence of interferon."

For more on this firm you can head to our past Balyasny coverage.

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