Billionaire Steve Cohen Owns Shares of This Stock That Has Soared 1,600% in The Past Year

Abivax shares have surged >1,600% over the trailing 12 months after obefazimod aced a Phase 3 trial for ulcerative colitis; the company’s market cap is €7.13bn ($8.3bn). Point72 first bought ABVX in Q4 2023, holds ABVX as 0.43% of its portfolio and reduced its stake by 17.65% in Q4. The stock could re-rate on positive maintenance-trial results, but substantial downside remains if setbacks occur and upside may be limited given current valuation, so consider only small, diversified positions.

Analysis

A positive maintenance readout is the obvious near-term binary that will reprice risk premia, but the more important second-order effect is on the pricing and uptake dynamics across the UC therapeutic stack. A therapy that can avoid immunosuppression changes payers’ willingness to tolerate higher net-cost specialty medicines and could force rebates/discounting pressure on entrenched biologics and JAK franchises, compressing incumbents’ pricing power over 1-3 years.

Regulatory and commercial frictions are the largest asymmetrical risks. Even with strong efficacy, expect label carving (restricted subpopulations), long-duration safety post-marketing commitments, and tougher HTA negotiations in Europe that can blunt peak sales; conversely, a clear safety advantage would materially shorten competitors’ product life cycles and accelerate targeted M&A interest from big pharmas seeking immunology inorganic growth.

From a volatility and positioning perspective the current market cap implies a lot is priced in: that creates an event-driven trade with high information content but little margin for error. The maintenance readout (likely within quarters, not years) is a short-duration catalyst — one readout can create 30–70% moves both ways — so structure exposure to cap downside or sell premium where appropriate. Liquidity and IV skews around biotech events favor calendar/debit-spread constructions over outright naked directional bets.

Contrarian angle: the market seems to be treating the program as de-risked; that consensus underestimates payer/regulatory drag and competitor product cycles that can blunt uptake even after approval. If you’re skeptical of durable commercial monopoly, prefer option-defined longs or pairs rather than large outright equity stakes that assume a clean path to broad label and favorable pricing.

Key Decisions for Investors

• Tactical small-cap long: establish a 0.25%–0.5% portfolio notional long in ABVX ahead of the maintenance readout (3–9 month horizon). Take profits at +50–80% on a clean readout; hard stop-loss 30% to limit capital at risk. Rationale: asymmetric payoff for defined cash size while avoiding excessive portfolio concentration.
• Defined-risk option play: buy a 6–9 month ABVX call debit spread (buy nearer-OTM call, sell further-OTM call) sized to equal 0.5% portfolio exposure. This caps max loss to premium paid while allowing ~3x–5x upside if the event surprises materially positive — favorable when IV is rich and binary upside is concentrated.
• Market-neutral hedge: pair a small ABVX long (0.25%) with a short position in a broad biotech ETF (e.g., XBI) sized to neutralize beta over 3 months. Time horizon: event-to-event (readout ± 1 month). Purpose: capture idiosyncratic upside while hedging sector/systemic drawdowns that often accompany negative biotech news.
• Income/convexity trade for conservative exposure: buy ABVX and sell near-term covered calls (3 months) to collect IV premium equal to ~2%–5% yield per cycle, rolling as needed. Use this if you want limited upside cession in exchange for income while maintaining exposure to potential M&A or regulatory upside.