A New York hedge fund specializing in medical device and biotech plays cashed in again on NxStage Medical Inc. (NSDQ:NXTM), selling off about 5 percent of its overall stake after a recent bounce in the company’s stock price.
Deerfield Management, which manages more than $1 billion in assets through its various investment partnerships, sold a total of 206,228 NxStage shares in recent days, pocketing just more than $1.5 million in gross proceeds. A Deerfield offshore vehicle, Special Situations Fund International, made the majority of the trades, according to regulatory filings.
The Lawrence, Mass.-based portable dialysis equipment manufacturer’s stock is fetching some of its best prices in years. NxStage shares recently pushed well past $7 for just the second time since February 2008. Deerfield began unloading its shares Dec. 3, when prices reached $7.44, and continued to deal until shares hit $7.37 Dec. 7. As of the close of the market yesterday, when shares of NxStage were trading at $7.38, the company’s stock is up 284 percent since bottoming out at $1.92 per share May 6.
Deerfield and managing partner James Flynn have a penchant for buying NxStage on the cheap. Since the start of the year, Flynn purchased nearly 1.2 million shares, with the bulk of the buying occurring during the first quarter as the stock was bounced between $2.13 and $3.99 a share. The largest spree came last year during April, May and June, with Flynn doubling down amid a general selling spree after NxStage disappointed Wall Street despite meeting first-quarter revenue and net loss forecasts.
Since then, Deerfield has been consistently cashing in on its bets over the past six months, selling off small pieces of NxStage as its share price rebounded. The most recent transaction is the largest since a September sell-off, when the firm moved 226,000 shares, good for $1.5 million.
Overall, Deerfield currently owns 4.4 million NxStage shares, equal to about 9.5 percent of the company’s stock. That makes it the company’s fourth-largest stakeholder, according to the company’s most recent proxy statement.