A New York hedge fund is proving to be an astute trader in NxStage Medical Inc., selling off more of its stake this week just ahead of a small slump in the company’s share price.
New stock ownership reports filed with the U.S. Securities and Exchange Commission show that Deerfield Management sold a total of 94,640 NxStage shares between Sept. 21 and Sept. 23, taking in $229,532 in gross proceeds. The hedge fund, which specializes solely in healthcare and biotech plays, earlier this month sold 226,638 of its shares in the Lawrence, Mass.-based manufacturer of portable dialysis equipment, generating slightly more than $1.5 million.
The transactions, made through a pair of limited partnerships created by Deerfield managing member James Flynn, came as NxStage stock was trading between $6.72 and $6.76 a share. Since that time, the stock has trended lower, dipping to a $6.27 close yesterday before recovering somewhat in Friday trading.
Flynn was a heavy buyer of the stock earlier this year, snapping up 1.2 million shares after NxStage fell as low as $1.92 a share in May. Overall, Deerfield owns 4.8 million NxStage shares through its various entities, equal to about 10.3 percent of the company.
NxStage stock is up about 240 percent since its May low. Deerfield’s stake — representing the company’s third-largest institutional ownership behind Credit Suisse and another New York hedge fund also specializing in healthcare plays, Orbimed Advisors — is worth about $31.2 million.