Baupost Group acquired a stake in Paratek Pharmaceuticals Inc (NASDAQ:PRTK) based on its 13G filing with the Securities and Exchange Commission (SEC).
Paratek is primarily focused on the development and commercialization of omadacycline as a late-stage antibiotic candidate. Omadacycline is a broad-spectrum intravenous and oral once daily antibiotic candidate for serious community-acquired infections.
The filing showed that Baupost Group owns 1,735, 218 shares or 12.04% of the outstanding shares of Paratek Pharmaceuticals Inc (NASDAQ:PRTK).
Seth Klarman, president of Baupost Group indicated that the hedge fund’s position in the pharmaceutical company were purchased and are held in the ordinary course of business.
The hedge fund did not acquire its position in Paratek Pharmaceuticals Inc (NASDAQ:PRTK) for the purpose of, or with the effect of changing or influencing the control of the company’s shares.
Baupost Group’ stockholding in the company “were not acquired and are not held in connection with or as participant in any transaction having that purpose or effect,” according to Klarman.
Klarman is rarely involved in activist situations and the filing and the nature of it (being a 13G and not a 13D) confirm that there is no exception to Klarman’s style in this case.
Paratek merged with Transcept
Paratek Pharmaceuticals Inc (NASDAQ:PRTK) completed its merger with Transcept Pharmaceuticals Inc on October 30, 2014. After the merger Transcept changed its name to Paratek and the combined company is trading under the symbol PRTK on NASDAQ.
Prior to the completion of the merger some of the current and new investors of Paratek Pharmaceuticals Inc (NASDAQ:PRTK) including Abingworth LLP, Aisling Capital, Baupost Group, Omega Funds among others invested $93 million.
The combined company has approximately $108 million in cash in its balance sheet before the payment of transaction and other fees. Last week, the company announced the appointment of Douglas Pagan as CFO. He was the former vice president of finance at Acceleron Pharma Inc (NASDAQ:XLRN).
The stock price of Paratek Pharmaceuticals Inc (NASDAQ:PRTK) closed at $27.99 per share, up by more than 5% on Thursday.
Baupost Group’s other new positions
In November, Baupost Group also acquired 5,367,300 shares or 11.72% stake in Forward Pharma A/S (NASDAQ:FWD) and 2,495,913 shares or 12.86% stake in Atara Biotherapeutics Inc (NASDAQ:ATRA).
The stock price of Forward Pharma dropped more than 2% to $19.91 per share while Atara Biotherapeutics fell more than 11% to $27.60 per share on Thursday.
Many value investors have often wondered why Klarman invests in small biotechs, which are hard to value. As exclusively reported by ValueWalk, Klarman noted that he has been investing in the space as analysts who understand the area well, have joined the hedge fund.