Hedge funds specializing in life sciences and fledgling biopharma stocks posted varied results in March, when most stock indices fell sharply. Many funds made money, including one that surged by double digits, whereas several others posted losses. Even so, most of these sector funds were profitable for the first quarter.
Generally, biopharma stocks are driven more by positive or negative news surrounding clinical trial results and acquisition announcements than by broad stock market dynamics.
“The combination of improved visibility and strong market performance has supported a more favorable environment, further bolstered by renewed optimism around strategic deal making and a potential reopening of the initial public offering market,” the Janus Henderson Biotechnology Innovation group said in a commentary dated March 4, early in the market sell-off. “More important, the increasingly constructive backdrop has shifted attention back to what has always driven the sector over the long term: innovation. On that front, 2026 is shaping up to be a catalyst‑rich year, with a number of highly anticipated drug launches, clinical trial readouts, and regulatory decisions across several major treatment areas.”
The top performer in March was Avoro Capital Advisors, which rose 10 percent for the month, putting it up 4.5 percent for the quarter, according to an investor. Its No. 1 long, United Therapeutics, surged nearly 18 percent last month on encouraging Phase 3 trial data in its TETON program for idiopathic pulmonary fibrosis. At year-end, the stock was the firm’s largest long, accounting for more than 12 percent of U.S. assets. Avoro had boosted its stake in the stock by more than 28 percent in the fourth quarter. No. 2 long Ascendis Pharma, which makes up more than 10 percent of assets, rose more than 7 percent for the quarter.
Another top performer was Affinity Healthcare Fund, which picked up about 8.6 percent in March and 14.62 percent for the quarter, according to a hedge fund database. It continued to be led by Apogee Therapeutics, its largest U.S.-listed common stock long, which jumped 20 percent in March and is up 16 percent year-to-date. Shares of Xenon Pharmaceuticals surged 35 percent in March following encouraging clinical trial results for azetukalner, its lead epilepsy drug.
Other funds added a point or two in March — still better than most hedge funds.
For example, Perceptive Advisors picked up 1.7 percent for the month and 3.5 percent for the quarter. Janus Henderson's biotechnology strategy rose 1.4 percent in March, putting it in the black for the year by 50 basis points.
Some funds made money last month but remained in the red for the year.
RTW Investments gained 2 percent in March but was still down 4.2 percent in the first quarter. Soleus Capital Management added 20 basis points in March, trimming its loss for the year to 2.5 percent.
And still others lost money last month but were in the black for the quarter: Averill was off 1.2 percent in March but up 10.5 percent for the first quarter. Averill Madison dropped 2.4 percent for the month but gained 10.8 percent for the quarter. Cormorant Asset Management declined by nearly 7 percent in March but added approximately 3 percent for the quarter. Casdin Capital continued to lose money and is now down between 15 and 20 percent for the year.
