Boxer Capital, LLC invents and invests in biotechnology companies that aim to drastically improve medicine. To celebrate the firm’s success in this year’s Hedge Fund Awards we profile it to find out more and explore the secrets behind its success.
stablished in 2005 by Co-Founder, CEO, and Portfolio Manager, Aaron Davis; Co-Founder, Chris Fuglesang and its investor, Joe Lewis of the Tavistock Group, Boxer Capital leverages its internal expertise within the drug development and biotechnology industry to evaluate pre-clinical and clinical data from biotechnology companies that are positioned to generate outsized returns.
Boxer Capital maintains a portfolio of public and private companies, with a focus on biotechnology drug development across multiple therapeutic indications. Since its inception in 2005, the firm has achieved remarkable success, generating a 34% IRR and a cumulative return of 4,546%. In 2018, the firm generated an annual return of 70%, which, as notable as this is, still only serves as its fourth best annual return to date. Eight of the past 13 years, the firm has generated 30%+ returns.
Beyond its monetary growth, Boxer Capital has supported the advancement of therapeutic breakthroughs for oncology and rare disease patients through its wide-ranging investments in companies including:
• AveXis Inc. (AVXS): AVXS developed the proprietary gene therapy, AVXS-101, that changed disease progression of Spinal Muscular Atrophy (“SMA”) and ultimately led to the company’s acquisition by Novartis in April of 2018 for $8.7 billion USD
• BeiGene Ltd. (BGNE): BGNE takes an innovative approach in developing molecularly targeted and immune-oncology drugs to treat cancer
• Blueprint Medicines Corporation (BPMC): BPMC’s platform seeks to deliver a new generation of highly selective kinase therapies to dramatically improve patients’ lives
• Cougar Biotechnology (acquired by J&J in 2009): Cougar focused on treating metastatic castration-resistant prostate cancer through an inhibitor with antiandrogen activity. In May of 2009, Cougar was acquired by Johnson and Johnson for $1 billion USD
• Mirati Therapeutics (MRTX): MRTX is a clinical-stage oncology company developing targeted therapeutics to address the genetic, and immunological promoters of cancer.
Most of Boxer Capital’s investments begin from one of several proven investment theses, each involving substantial due diligence on fundamentals of the prospective company, paired with “big picture” thinking of the industry and sub-sectors. Through this disciplined methodology, the firm’s research and investment team identify opportunities to translate the inefficiencies of the biotechnology market into risk-adjusted returns over the short, medium, and long-term.
Alongside their concentrated long portfolio exists an overall hedge of selective company and index shorts to balance their sector exposure in the markets. This investment approach has enabled Boxer Capital to remain a key player within the biotechnology investment space, giving it the ability to invest in research that will lead to some of the greatest developments in the medical markets in 2019 and beyond.
Partnering with the brightest minds in science and medicine, Boxer Capital aims to help bring what was once only imaginable to reality. Every member of the Boxer Capital team takes pride in being at the forefront of improving outcomes for patients. Focusing most of their investment efforts on innovative discoveries that hold potential to bring life-saving options to patients, the firm has an underlying passion and expertise for investing in oncology.
One of the current key challenges that exist within the biotechnology investment market is the continued drug pricing rhetoric and overhang from the political environment on desiring pricing change within the industry. Boxer Capital works to overcome these macro challenges of investing in the sector with a concentrated portfolio of long positions, focused mostly on companies developing drugs that will exponentially improve the current standard of care for patients; these must be “game changing” with a strong likelihood of success. Therefore, any major political or pricing shifts within the industry that may take form remain secondary in importance to the necessity for medical advancements to improve the daily lives of patients suffering from these illnesses.
The firm’s key investor, Tavistock Group, is an international private investment organization founded by Joe Lewis over 40 years ago. Tavistock Group is built on a core philosophy to strive for excellence in everything it undertakes. Entrepreneurial and progressing, Tavistock Group values long-term relationships and identifies investment opportunities around the world that can benefit from capital, experience, flexibility, and a broad base of resources.
Boxer Capital’s international infrastructure and scale, coupled with its deep experience in biotechnology drug development and investing, positions them as one the premier life science investment firms in the industry. The firm’s expert team includes scientists and clinicians who have been on the forefront of research and discovery across multiple therapeutic indications; such as cardiovascular health, oncology, and neurological disease, among others. Several of the firm’s partners continue to practice medicine and have had the privilege of leading clinical development for multiple drugs that are treating patients today. This unique combination of medical and investing expertise has led to a 13-year proven track record.
Seeking to expand its marked success, Boxer Capital is working towards many exciting developments in the coming year. With strong returns since inception, Boxer Capital has expanded its team, adding several new members to its research department to help drive growth in 2019 and beyond, ensuring a bright future for both itself and Tavistock Group.
Company: Boxer Capital, LLC
Contact: Aaron Davis