While everyone in the market has been losing their collective minds this week, RA Capital Management just decided to do the opposite—a.k.a. Unleash an impressive “BTFD” vibe while scooping up 824,041 shares of Janux Therapeutics for $25.3 million. On paper, this looks like a big-brain bet on biotech, but Janux is currently trading dangerously close to its 52-week low of $29.63. Meaning RA Capital has either lost their mind, or they’re seeing deep value that no one else is. 

(Source: Giphy) 

In short, Janux Therapeutics is a clinical-stage biotech company that specializes in Tumor Activated T Cell Engagers (TRACTr) and Tumor Activated Immunomodulators (TRACIr)—which, in English, means they’re trying to weaponize the immune system to obliterate cancer. Bold, ambitious, and potentially a gold mine if they get it right. And RA Capital is no casual retail investor throwing darts at a biotech. In fact, they’re one of the biggest names in healthcare investing (when they move, people pay attention). 

But, but, but… as of right now, Janux shares are down -42% YTD, -26.79% over the last six months, and down -18.94% this month. Translation: It’s obvious investors have been getting absolutely rekt for quite some time. So why the extra $25.3 million investment now? 

(Source: Giphy) 

For one, either RA Capital is averaging down or they believe the market is completely mispricing the company’s potential. See, Janux isn’t some penny-stock biotech scraping for funding. They’ve got a seriously healthy balance sheet, with a current ratio of 59.21 (translation: they’ve got cash and aren’t drowning in debt). However, Analysts are all over the place, with price targets swinging from $25 to $200—which basically means nobody knows what the hell is going on LOL. 

Which is why, despite RA Capital’s big swingin’ buy yesterday, the market didn’t exactly throw a party. Shares have been bleeding out, and while this could be a sign of biotech investors losing their nerve, it also means RA Capital could be loading up before a major catalyst (Wait, they may have privileged information that retail investors don’t? Shocker). 

(Source: Defense World) 

Additionally, Cantor Fitzgerald is still screaming “Overweight” with a $200 price target. (again, either these two blokes know something we don’t, or they’re just feeling really optimistic.) On the other hand, HC Wainwright is less bullish, slashing their Q1 earnings forecast from -$0.46 to -$0.48—not catastrophic, but not exactly confidence-inspiring either. So then, what’s the truth? Somewhere between “this stock is an easy double” and “this is just another biotech money pit.”

Meaning, until we uncover more information on the matter, RA Capital either just made a calculated bet on Janux’s pipeline delivering a blockbuster drug or they’re rolling the dice on averaging down. Now, given their track record, it’s probably the former—but remember, biotech is a notoriously unforgiving game. 

(Source: Giphy) 

In the end, if Janux delivers positive trial data, this could be a moonshot. If not? Well, biotech graveyards are littered with “promising” companies that never made it past Phase 1. Regardless though, one thing is for sure: RA Capital just put $25.3M on the table. And if there’s one rule about smart money, it’s that they don’t make reckless bets. They see something here, and when the pros start stacking chips, it’s usually for a damn good reason.

For now, we wait to see what that good reason is—so place your bets accordingly, friends. And as always, stay safe and stay frosty! Until next time… 

P.S. $1.4 million, $1.02 million, $6.715 million and $25.3 million—these aren’t lottery winnings or Miami real estate prices… they’re all insider transactions that have gone down in the last week while retail investors were busy panic-selling everything. Want to track these corporate fat cats in real-time so you can pretend you're also an executive with material nonpublic information? (Legally, of course.) Click here to join Stocks.News premium while you still can…

Stocks.News does not hold positions in companies mentioned in the article.