This Fund Locked In Gains With a $14.5 Million Biotech Exit Amid a Staggering Stock Rally

Tanager Wealth Management disclosed in a January 26 filing that it sold out its entire Centessa Pharmaceuticals (NASDAQ:CNTA) stake in the fourth quarter, an estimated $14.50 million trade based on quarterly average pricing.

What happened

According to a Securities and Exchange Commission (SEC) filing dated January 26, Tanager Wealth Management LLP eliminated its full position in Centessa Pharmaceuticals, selling 598,044 shares. The estimated transaction value was $14.50 million based on the last-disclosed position value.

What else to know

Tanager Wealth Management LLP’s exit means CNTA now represents 0% of reportable 13F AUM (down from 1.5% the prior quarter).

Top holdings after the filing:

• NYSEMKT:ITOT: $148.38 million (14.8% of AUM)
• NYSEMKT:XHLF: $88.18 million (8.8% of AUM)
• NYSEMKT:VEA: $69.60 million (6.9% of AUM)
• NYSEMKT:PICB: $68.47 million (6.8% of AUM)
• NYSEMKT:VTI: $66.68 million (6.7% of AUM)

As of January 26, CNTA shares were priced at $25.73, up about 56.7% over the past year and vastly outperforming the S&P 500’s roughly 14% gain in the same period.

Company overview

Company snapshot

• Centessa Pharmaceuticals develops a portfolio of clinical-stage and emerging pipeline products, including Lixivaptan for polycystic kidney disease and SerpinPC for hemophilia, as well as several early-stage candidates targeting autoimmune, respiratory, and rare diseases.
• The company operates a research-driven business model focused on the development of proprietary therapeutics in the biotechnology sector.
• Centessa focuses on developing therapies for patients with unmet medical needs in rare and serious disease segments.

Centessa Pharmaceuticals plc is a clinical-stage biotechnology company headquartered in the United Kingdom, with a market capitalization of $3.46 billion and a focused pipeline in rare and serious diseases. The company leverages a diversified portfolio approach, advancing multiple candidates across nephrology, hematology, immunology, and respiratory indications. Its strategy centers on developing differentiated therapies for underserved patient populations, aiming to establish a competitive edge through innovation and clinical expertise.

What this transaction means for investors

As you might expect from a wealth advisory, a large part of Tanager Wealth Management’s capital sits in broad market and factor ETFs, so individual biotech positions like this one tend to have a narrower job. They are there to work when momentum and fundamentals align, not to linger indefinitely through binary risk.

To be very clear, however, Centessa’s fundamentals are moving in the right direction. In its latest earnings release, the company reported $349 million in cash, equivalents, and investments, and $250 million from investors in November. Additionally, a CEO transition announced in December also formalized Centessa’s shift to a more focused orexin strategy.

The stock reflected that progress, rising nearly 57% over the past year. But context matters. This fund’s largest holdings are broad equity and bond ETFs designed to reduce idiosyncratic risk. Against that backdrop, a single clinical-stage biotech can quickly become oversized after a sharp rally.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Centessa Pharmaceuticals Plc, Vanguard FTSE Developed Markets ETF, and Vanguard Total Stock Market ETF. The Motley Fool has a disclosure policy.