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

Abivax shares have risen over 1,600% in the trailing 12 months after its lead candidate, obefazimod, aced a Phase 3 trial; the company now has a market cap of €7.13bn ($8.3bn). Point72 (Steve Cohen) first bought ABVX in Q4 2023, holds 0.43% of the fund and trimmed its stake by 17.65% in Q4. While Phase 3 success suggests meaningful upside, much of that success appears priced in and the downside is large if maintenance results or regulatory outcomes disappoint—suitable only for a small, diversified position.

Analysis

Obefazimod’s clinical profile creates asymmetric commercial and strategic outcomes beyond the usual biotech binary: a differentiated safety/efficacy combo forces payers to re-evaluate step therapy and could compress market share for high-cost biologics even if obefazimod achieves only partial label wins. That dynamic accelerates two second-order effects — (1) incumbent biologic vendors face pressure on price and prescription volume, increasing their need to defend margins via discounts or indication-specific deals, and (2) successful validation materially raises takeover optionality for the developer because acquirers value label expansion and payer flexibility more than near-term revenues.

On the market-structure side, the stock’s swingy moves attract directional and volatility capital, transiently boosting listing/derivatives flow revenues for market operators and raising short-term option-implied skew. That creates a window where exchange/market-structure receipts (earnings sensitivity) can be monetized through targeted call-spread exposure to the exchange operator while financing asymmetric long exposure to the biotech through options. The immediate risk is classic: a single negative readout or regulatory nuance can reprice probabilities to near-zero in days; the mid-term risk is payer pushback after approval which would manifest over 12–36 months as slower uptake and narrower realized pricing.

Consensus is pricing a high probability of clean commercialization; that’s where we disagree. The market underestimates execution complexity: scaling manufacturing for a novel MOA, negotiating formularies across geographies, and surviving label carve-outs all take 12–36 months post-approval and materially reduce upside versus a straight “yes/no” clinical binary. For investors who want exposure, preferred structures are those that isolate the clinical readout binary and leave follow-through commercialization risk to buyers (acquirers, large pharm partners).

Key Decisions for Investors

• Long-structured ABVX (defined-risk): build to 0.25% of AUM in ABVX shares using a 4-week staggered entry; hedge with 9-month puts at ~25% OTM to cap downside. Size objective: 0.25% AUM (~$25M on a $10B fund). Risk/Reward: asymmetry of ~2x–3x on a positive readout within 6–12 months vs. loss capped to ~25% premium paid for puts; if conviction increases after positive maintenance readouts, consider trimming to realize gains.
• Event LEAP spread (costed upside): buy ABVX Jan-2028 calls 50% OTM and sell Sep-2026 calls 20% OTM to finance (~calendar spread); notional sized to 0.1% AUM. Rationale: captures multi-year upside if commercialization scales while limiting carry cost; tail risk is short-dated call assignment if stock gaps above sold strikes — manage by rolling or covering.
• Macro/Market-structure play: buy NDAQ 3-month 5/10% OTM call spread sized to 0.05% AUM to capture incremental listing/derivatives revenue if biotech volatility persists. Risk/Reward: limited downside (premium paid) with 2–4x upside if volatility-driven revenue and listing activity surprise to the upside over the next quarter.
• Financing/alpha overlay: sell a small NVDA 6–9 month call spread (10%/25% OTM) sized to fund half the premium for the ABVX LEAP spread (size <0.05% AUM). Rationale: tactical view that part of AI froth can mean-revert into event-driven biotech flows over coming quarters. Risk: if NVDA continues strong, losses are capped by the sold-spread structure; treat as tactical, not core position.