Biotech stocks have grabbed the attention of many investors in the last couple of months as the fight against Covid-19 continued to gain traction. Both small and large-cap biotech companies have made it to the headlines, but it was the small companies such as CytoDyn Inc. (CYDY) that truly tested the nerves of investors. Even though we acknowledge that Covid-19-related developments will be the key driver of pharmaceutical stocks in the next few months, we believe there are lucrative opportunities across the board in the biotech sector – not just in companies that are developing vaccines and antibodies against the novel coronavirus. Trillium Therapeutics (TRIL) stock has gained a staggering 460% this year, and hedge funds are betting on this small biotech company to deliver the goods in the coming years.
The company profile
Trillium Therapeutics is a clinical-stage oncology company developing therapies for the treatment of cancer. The company was formerly known as Stem Cell Therapeutics Corp. and changed its name to Trillium Therapeutics Inc. in June 2014.
Since the appointment of Jan Skvarka as the CEO of the company in September 2019, a number of initiatives have been carried out to improve the financial position of the company. Some of these initiatives have already seen success and the company has reduced its costs over the last 6 months in line with its strategy to remain solvent until the company can commercialize one of its products that is in the clinical stage.
Both TTI-621 and TTI-622 are in early-stage development. Here’s a quick look at the pipeline of the company.
The success of the company, as one could imagine, depends entirely on these two products.
The macro-economic outlook is favorable
Emerging technologies are creating a transformative opportunity for life sciences, and scientific achievements are on a record pace. Global prescription drug sales are forecast to grow at a healthy annual compound rate of 6.5% in the next five years.
There are multiple tailwinds facing pharmaceutical companies. Global population growth, an increasing number of population aged 60 plus, and the rapid growth in the number of people with chronic conditions are some of these macro-economic tailwinds.
Medicine spending for cancer is at a historic high and is expected to grow exponentially in the coming years along with the expectation for successful developments of treatments to contain the spread of cancer cells or to eliminate cancer altogether.
Trillium Therapeutics, which has made steady progress in its oncology trials, is poised to deliver substantial returns to investors if it can push a product into the commercialization stage, which is not too far away.
The smart money is behind Trillium Therapeutics
Investors often look for signals from the up above – no, not from the skies but from billion-dollar hedge funds – to get an idea about stocks that are receiving the love of the smartest brains in the industry. Beat Billions requests investors to take a moment to acknowledge that these investors, like every one of us, get their investments wrong consistently. Therefore, investments by hedge funds or any other investing guru should not be considered as a definitive sign of stellar returns. However, altogether ignoring the “smart money” is not a prudent decision either. The best course of action, therefore, is to strike a balance between the two and combine these insights with a fundamental analysis of a company.
Trillium Therapeutics stock has received a lot of love from hedge funds in 2020, and below are some of the most noteworthy funds with a stake in TRIL stock.
|Hedge fund||Number of Trillium Therapeutics shares owned|
|Avoro Capital Advisors LLC||4.95 million|
|Marshall Wace North America||2.59 million|
|Fairmount Funds Management||1.8 millio|
|Millennium Management||1.7 million|
Even after the massive run-up of the share price, these hedge funds have not trimmed their position, indicating shares could still be significantly undervalued according to the brains behind these hedge funds.
CD47 is becoming an attractive oncology target, and the leading player of this space, Forty Seven, was acquired by Gilead Sciences for $4.9 billion in March. This sent Trillium Therapeutics stock higher as the largest pharmaceutical giants in the world are now showing a preference to increase their research in the field of CD47 studies in a bid to fight cancer.
Institutional investors are betting on Trillium to translate its encouraging clinical trial results into profitability in the coming years. Beat Billions believes this small-cap stock is worth paying attention to, and the recent weakness in the share price presents an attractive opportunity for growth investors. The company remains well-funded to remain solvent throughout this year plus some.
We invite you to drop an e-mail to firstname.lastname@example.org in case you need access to our Excel model that summarizes the financial position of the company.
**If you enjoyed this article, please consider signing-up for Beat Billions by providing your e-mail address in the box above. You will then receive a SINGLE daily e-mail with all the articles published on Beat Billions.
Come back again to read more on small-cap stocks. We publish multiple times a week.