Hedge funds saw a boost in July thanks to a rally in French biotech Abivax, as its US-listed shares jumped more than 580% in a single day following positive Phase 3 trial results for its ulcerative colitis oral treatment obefazimod, according to a report by the Wall Street Journal.
The share-twice survey lifted Abivax’s market value from around $500m to over $6bn.
Funds including ADAR1 Capital Management and Deep Track Capital, major holders of Abivax stock, reportedly gained 18% and 8% respectively in July. ADAR1, which manages roughly $850m, recouped earlier losses and is now up nearly 16% year-to-date, while Deep Track is modestly positive. The rally helped offset broader sector weakness that weighed on healthcare-focused hedge funds earlier in 2025 amid US regulatory changes and drug-pricing pressure.
ADAR1’s gains were underpinned by proprietary research that raised the estimated probability of trial success from 16% to 50–60%, positioning the firm to benefit from the upside while recognising the potential for significant downside. The Phase 3 data confirmed obefazimod as a safe and effective treatment for moderately to severely active ulcerative colitis.
Other biotech-focused funds also profited from late-stage trial successes and M&A activity. Celcuity shares surged 167% after positive breast-cancer therapy data, while Verona Pharma was acquired by Merck at a 23% premium, contributing to strong performance for funds such as Caligan Partners, which counts both Verona and Abivax among its top holdings. Collectively, hedge funds are estimated to have gained at least $1.4bn on Abivax positions in July alone.
