Hedge fund investor Sahm Adrangi‘s is what is known as an activist or value investor, but his activism didn’t start on the stock market. The Iranian born Adrangi, who moved to the United States at the age of 5, initially joined protest groups while attending Yale University from 1999 to 2003. He became disillusioned by their tactics and insistence that he support causes that he didn’t agree with and grew to become more conservative in his views and discovered new ways to “fight the man”. Initially wanting to be a journalist, he wrote and edited the Yale Daily News but ended his college career by earning a Bachelor of Arts in Economics.
The activist investor who is the Chief Investment Officer and founder of Kerrisdale Capital Management LLC. has a passion and talent for bringing to light shady business practices and even outright fraud, and he makes a profit from it.
Sahm Adrangi has recently been making headlines with the short selling attacks Sahm Adrangi has been making on biotech companies that were developing drugs that he foresaw as doomed to failure based on the shoddy Phase I and II research results. The two drugs included the prostate cancer vaccine ProstVac that was being developed by Bavarian Nordic and Sage Therapeutic’s failed brexanolone designed to treat a type of epilepsy known as SRSE. He had predicted the failure of these drugs more than a year before the Phase III results were released, both showing no verifiable effect than a sugar pill but with more potential side effects.
Now Sahm Adrangi has a new drug in his crosshairs and investors are taking notice. This drug, which is still in research phases but already showing lackluster results, is known only as NEOD001 and is being developed to treat AL amyloidosis by the company Prothena. Sahm Adrangi insists that the results shown in initial testing could be produced from natural variances in the progression of the disease itself and the numbers are being skewed and misrepresented to mislead investors and hopeful patients and doctors. While nobody wants a medication to fail, bringing a useless one to market could have even deadlier side effects. Prothena’s stock dropped 8% after Adrangi made his research public. See This Page for related information.
Investor Sahm Adrangi is making another bet against another potentially shoddy drug, this time it’s Prothena’s NEOD001. Prothena’s drug, which is entering final testing, was designed to treat a bone marrow disorder that causes patients to produce antibodies that cannot be broken down, AL amyloidosis which can affect multiple body systems. The disease has no foreseeable cure and is currently treated with forms of chemotherapy. According to Sahm Adrangi’s research, the initial testing’s results were exaggerated to show success when in actuality it could be explained by random responses from the complicated disease.
After he went public with his research through various outlets, Prothena’s stock dropped by 8% with a further drop expected upon conclusion of Phase III testing. This comes right on the heels of 2 other drugs, Bavarian Nordic’s Prostvac and Sage Therapeutics brexanolone, being found essentially useless years after Sahm Adrangi predicted their failure in late-stage testing.
While betting against a potentially life-changing drug may seem strange at first, Adrangi maintains that these companies were aware of their ineffectivity well before final testing but continued to push them to draw investors. They did this by allegedly misrepresenting the findings and using too small of testing pools. Sahm Adrangi is known as an activist investor, a new type of investor that uses their own personal values to determine their actions on the stock market. Instead of investing into companies he deems worthwhile, he uses a technique known as short selling.
Short selling, or shorting, is when an investor borrows shares from a company they expect to fail while the price is high, selling immediately, and then rebuying them at a lower price and returning the company. This allows Sahm Adrangi to keep the difference and make a profit. While the technique is risky and looked down upon some, the hedge funder has taken down several dishonest and outright fraudulent multi-million-dollar companies. Read This Article for more information.
Sahm Adrangi is the founder and Chief Investment Officer of Kerrisdale Capital Management LLC, a boutique investment firm in New York. The Iranian immigrant graduated from Yale University in 2003 with a bachelor’s degree in Economics and a desire for change in the unfair trading policies of the stock market.
See Also: http://www.zerohedge.com/news/2017-05-09/kerrisdale-capital-reveals-latest-short-selling-target-will-it-be-next-straight-path