Interesting.
Perhaps Baker Brothers simply wish to dispose of their stake in Acadia, their third largest holding, in order to reinvest in other holdings. ACAD has performed well over the last month, rising to US$17.44 from a low of US$13.40. Still, it’s well off US$20.40 which it reached just 3 months ago and well, well off the high of US$57.40 it reached in late 2020. So it would seem to be a strange time for the Baker Brothers to sell. That said, many other biotech stocks are also well off their highs, with many trading below their cash holdings, and perhaps the Baker Brothers believe they can identify better bargains to invest in with the substantial proceeds they could reap from sale of their ACAD stake.
However, in my opinion, Baker Brothers is more likely on a fishing expedition. Dangling the bait (an assured 26.1% stake) to flush out any big fish which might be interested in acquiring Acadia.
Whatever their motive, it’s important to note that Baker Brothers are not committed to selling their stake in Acadia and have a wide range of options. They may choose to sell all, some or none of their holding. They can sell to just one or to numerous parties. They can sell everything at once, or progressively. They can sell on market or negotiate off market. They can even lend out all or part of their stake for shorting, if they so desire.
Perhaps the answer to “Why now?” is that Baker Brothers have got wind that there is interest in acquiring Acadia. Offering their whole stake for sale would put pressure on any potentially interested parties to act now.
The only party that I am aware of that has significantly increased its holding in ACAD in recent times is Blackrock.
Blackrock declared 12.77 % ownership (21. 37m shares) of Acadia on 31/03/25, up from 7.63% (12.73m shares) on 31/12/24. BlackRock is said to have a strategic interest in the biotechnology sector, particularly in companies focusing on central nervous system disorders. But then again, as the world’s largest asset manager, with US$11.6 trillion assets under management, Blackrock has a strategic interest in almost everything.
The third largest holder in ACAD is Vanguard, which held an 8.34% stake on 31/03/25. Vanguard, btw, is the largest shareholder in Blackrock, which happens, btw, to own State Street!
Blackrock does sometimes acquire whole companies, but not biotechs. It has in the past used its large stake in pharma companies (Pfizer and Astra Zeneca) to encourage merger discussions.
Perhaps Blackrock has also got wind of interest in acquisition in Acadia and has opportunistically increased its stake in anticipation.
All just my speculation. As always, we will have to wait and see.
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