Hedge funds focused on life sciences and early-stage biopharmaceutical companies posted a wide dispersion of returns in March, as volatility across broader equity markets weighed on performance, according to a report by Institutional investor.
While some managers delivered strong gains, others recorded modest losses, though most strategies remained positive over the first quarter.
Sector specialists noted that biopharma equities tend to be driven less by macroeconomic conditions and more by company-specific catalysts such as clinical trial outcomes, regulatory updates and M&A activity.
Despite broader market weakness during the month, several funds benefited from stock-specific moves, with one manager reporting double-digit gains.
Avoro Capital Advisors was among the strongest performers, rising around 10% in March and up approximately 4.5% for the quarter, according to investor data. Performance was driven in part by its largest long position, United Therapeutics, which climbed nearly 18% during the month after positive Phase 3 data from its TETON programme in idiopathic pulmonary fibrosis. The position represented more than 12% of Avoro’s US long book at year-end, with the fund having increased its stake by more than 28% in the fourth quarter. Its second-largest holding, Ascendis Pharma, also contributed, gaining more than 7% over the quarter and accounting for over 10% of assets.
Affinity Healthcare Fund also posted a strong month, advancing around 8.6% in March and 14.6% for the quarter, according to hedge fund tracking data. Performance was supported by Apogee Therapeutics, its largest US-listed equity position, which rose 20% in March and is up roughly 16% year-to-date. Xenon Pharmaceuticals also contributed meaningfully after shares surged 35% during the month following encouraging clinical results for azetukalner in epilepsy.
Elsewhere, gains were more modest but still positive. Perceptive Advisors added approximately 1.7% in March, bringing its quarterly return to around 3.5%. Janus Henderson’s biotechnology strategy rose 1.4% over the month, leaving it marginally positive year-to-date.
The firm’s biotechnology team has maintained a constructive outlook on the sector, highlighting improving visibility around clinical pipelines and a potentially more supportive environment for capital markets activity.
In a March commentary, Janus Henderson noted that expectations for 2026 are being shaped by a robust pipeline of catalysts, including drug launches, clinical readouts and regulatory decisions across multiple therapeutic areas. The group also pointed to renewed optimism around strategic dealmaking and a possible reopening of the IPO market as supportive factors for sentiment.
However, not all managers were able to fully offset earlier weakness. RTW Investments gained around 2% in March but remained down roughly 4.2% for the first quarter, while Soleus Capital Management posted a marginal 0.2% monthly gain, narrowing its year-to-date decline to approximately 2.5%.
