In the grand tapestry of investment decisions, where fortunes rise and fall with the whim of the markets, sometimes a large-scale exit can send ripples through the landscape. MPM BioImpact, a fund that sounds as if it were plucked from the pages of a 1970s science fiction novel, made a notable move in the third quarter of this year. According to an SEC filing that arrived like clockwork on November 14, the fund shed its entire stake in Crinetics Pharmaceuticals-an amount totaling $12.3 million. With the precision of a surgeon removing a troublesome appendix, MPM BioImpact eliminated its holding of 428,975 shares. The impact of this, as it often is in the world of biotech, was swift, marked by a 19% dip in Crinetics’ stock price over the course of the year, leaving its shareholders in a state of reflection.
What Happened
To understand the move, we need to briefly wander into the territory of MPM BioImpact’s quarterly filings-a necessary evil for any fund that wishes to remain on the radar of the Securities and Exchange Commission. In their November 14 submission, it was revealed that MPM BioImpact sold every last one of its shares in Crinetics Pharmaceuticals. The $12.3 million value attributed to this transaction was calculated based on quarterly average prices, a standard practice in the world of investing. The fund’s holdings in Crinetics represented 2.1% of their assets under management (AUM) in the previous quarter. No small feat, though perhaps not enough to alter the course of history.
What Else to Know
As MPM BioImpact divested from Crinetics, the fund’s other positions remain curious artifacts of modern portfolio management. Here are the top holdings from the same filing:
- NASDAQ: MDGL – $46.1 million (7.5% of AUM)
- NASDAQ: CGEM – $45.4 million (7.4% of AUM)
- NASDAQ: RNA – $33.1 million (5.4% of AUM)
- NASDAQ: TRVI – $31.2 million (5.1% of AUM)
- NASDAQ: EWTX – $27.9 million (4.6% of AUM)
Meanwhile, as of Wednesday’s close, Crinetics shares found themselves at $46.03-an underwhelming figure for a company whose fate now hangs in the balance. Despite its prospects in the rare-disease pharmaceutical market, its stock has dropped 19% in the past year, a sharp contrast to the S&P 500’s 13% rise over the same period. If Crinetics were a person, one might be tempted to say that it’s having a rough patch.
Company Overview
| Metric | Value |
|---|---|
| Market capitalization | $4.4 billion |
| Revenue (TTM) | $1.5 million |
| Net income (TTM) | ($423.1 million) |
| Price (as of market close Wednesday) | $46.03 |
Company Snapshot
Crinetics Pharmaceuticals, in the business of addressing rare endocrine diseases with oral therapies, may sound like something straight out of a modern-day medical thriller. Their lead candidate, Paltusotine, is aiming to target acromegaly and neuroendocrine tumors, conditions that most of us probably wouldn’t encounter unless we were doing a deep dive into obscure medical journals. The company, with its large cash reserves, is trying to carve out a niche in a highly specialized and competitive market. The question, however, is whether Crinetics can navigate the rough seas of clinical development and commercialization-something that has kept more than one investor awake at night.
Foolish Take
In the volatile world of biotech, where stocks can swing like a pendulum with no apparent reason, MPM BioImpact’s decision to completely exit its position in Crinetics is particularly noteworthy. It’s a little like pulling out of a high-stakes poker game when the deck seems to be stacked against you. When a fund decides to abandon a high-risk, clinical-to-commercial transition-especially one that involves FDA approvals and the excitement (and peril) of launching new drugs-it’s a signal that the risk-tolerance bar has been adjusted, perhaps permanently. It’s as if MPM BioImpact had studied the field, weighed its options, and decided that other opportunities were more attractive. And, judging by the numbers, they might be right. Crinetics reported a net loss of $130.1 million for the third quarter, though they did manage to generate $143,000 from a licensing agreement for Paltusotine. A modest start, but nothing to write home about when your losses are in the hundreds of millions.
For long-term investors, the message from Crinetics seems to be this: Don’t be distracted by short-term stock fluctuations. Instead, look at the broader picture-this is a company that’s in the midst of transitioning into a commercial-stage player, with significant cash reserves and growing spending. Whether it survives or thrives depends, as always, on execution. But as MPM BioImpact’s exit shows, the world of biotech investment isn’t just about hope-it’s about cold, hard calculations and the sometimes unnerving feeling that, despite your best efforts, you’re still one bad move away from catastrophe.
Glossary
13F: A quarterly report filed by institutional investment managers to disclose their equity holdings to the SEC.
Assets under management (AUM): The total market value of investments managed by a fund or investment firm.
Clinical-stage biotechnology company: A biotech firm focused on developing drugs still undergoing clinical trials and not yet approved for sale.
Endocrine diseases: Disorders affecting hormone-producing glands like the thyroid, pituitary, or adrenal glands.
Neuroendocrine tumors: Rare tumors that develop from cells which release hormones in response to signals from the nervous system.
Proprietary drug candidates: Experimental medicines developed and owned exclusively by a specific company.
Rare disease pharmaceutical market: The segment of the drug industry focused on treatments for uncommon medical conditions affecting small patient populations.
Stake: The amount of ownership or investment a fund or individual holds in a particular company.
TTM: The 12-month period ending with the most recent quarterly report.
In the grand scheme of things, sometimes you just have to watch the players on the field, hope for the best, and occasionally remind yourself that it’s all part of the learning process. 📉
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2025-11-27 23:03