SAN FRANCISCO — “No one ever got really rich shorting stocks,” said Joe Edelman, the founder and CEO of Perceptive Advisors, a $7.5 billion biotech hedge fund, speaking during a STAT event here on the sidelines of the J.P. Morgan Healthcare Conference in San Francisco.
Edelman started his fund in 1999. Investing in risky biotech companies has made him a billionaire. Nearly all his money has been earned on the long side of Wall Street. But shorting stocks — betting against companies — is a practice mostly driven by “schadenfreude. People like watching other people suffer,” he joked.
Most recently, Perceptive shorted Cassava Sciences, a biotech company developing a controversial drug for Alzheimer’s disease that attracted negative attention for questionable clinical data. Yet its stock price kept rising even after allegations of data manipulation — some the data were allegedly faked under the direction of its executives — caught the attention of the Department of Justice.
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