Biotech rout in 2021 has led to some massive hedge-fund losses


Biotech stocks have fallen to earth with a thud in 2021 after soaring last year amid excitement over the development of COVID-19 vaccines, dealing big losses to some hedge funds.

The sector is being buffeted by concerns Congress will move to put a lid on drug pricing and a surfeit of early-stage biotech shares as the IPO market booms.

Perceptive Advisors, a prominent biotech hedge fund that manages about $9 billion, lost about 30% this year through November in its main fund, investors say. A hedge fund managed by OrbiMed Partners, which invests more than $18 billion in healthcare in public and private markets, has lost more than 40% this year through November, people familiar with the fund say. Both funds had scored big gains over the past two years.

Meanwhile, a hedge fund run by San Francisco-based Logos Capital, which manages about $1.4 billion, is down more than 25% for the period, other people say. Cormorant Asset Management lost 10% in November alone, adding to double-digit losses earlier in the year.

“It’s been a very challenging year,” said Bihua Chen, founder of Cormorant, which focuses on smaller biotech companies.

An expanded version of this report appears on

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