(Seeking Alpha) The biotechnology industry can be a difficult space to consistently pick winners. With so many companies claiming to have found the next best medical treatment, investors must look closely at the science and the underlying fundamentals of the stock. One additional area investors can look at to find alpha is to find out which biotechnology companies are being bought by hedge funds. One such company is Arena Pharmaceuticals (ARNA).
Arena Pharmaceuticals is a developmental biopharmaceutical company focused on discovering, developing, and commercializing oral drugs that target G protein-coupled receptors. Currently, the company has one main product that is used to treat obesity. The product is called Belviq.
During the current quarter, Arena has seen its net institutional purchases total 29.4 million shares. Since the company has a float of roughly 216 million shares, net institutional purchases totaled roughly 13.5% of the company’s total shares. A very impressive number for a company the verge of announcing major developments during 2013. The largest institutional holding of Arena is Wellington Capital, a very well respected money manager. Investors who have concerns about the company should take comfort in knowing that Wellington and all their analysts think highly of the company.