Bronte Capital, an investment management company, released its “Amalthea Fund” fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. The fund lost -2.12% in December, -0.97% for the quarter, and gained 15.60% for the calendar year. Compared to that, the MSCI ACWI index had gains of 1.28%, 4.63%, and 21.92% (in $A) during those periods, thanks to its global diversity. This quarter, and particularly in December, the market has been actively hostile to the fund’s strategy due to a generalized squeeze in high-short-interest names. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.

Amalthea Fund featured stocks like Karuna Therapeutics, Inc. (NASDAQ:KRTX) in the fourth quarter 2023 investor letter. Headquartered in Boston, Massachusetts, Karuna Therapeutics, Inc. (NASDAQ:KRTX) is a clinical-stage biopharmaceutical company. On March 1, 2024, Karuna Therapeutics, Inc. (NASDAQ:KRTX) stock closed at $316.24 per share. One-month return of Karuna Therapeutics, Inc. (NASDAQ:KRTX) was -0.26%, and its shares gained 59.77% of their value over the last 52 weeks. Karuna Therapeutics, Inc. (NASDAQ:KRTX) has a market capitalization of $12.057 billion.

Amalthea Fund stated the following regarding Karuna Therapeutics, Inc. (NASDAQ:KRTX) in its fourth quarter 2023 investor letter:

"December gave us a natural test of our shorting process. We have been short Karuna Therapeutics, Inc. (NASDAQ:KRTX) for most of 2023. Karuna are developing a drug (which they have coined “KarXT”) for the treatment of schizophrenia. KarXT is a combination of a molecule abandoned by Eli Lilly because of severe side-effects (xanomeline) and a generic used to treat urinary incontinence (trospium).

The bull case – simply stated – is that drugs which are effective in mental illnesses such as schizophrenia are hard to find. Moreover, they can’t be tested/explored in animals as there is no realistic mouse-model of schizophrenia.

The Lilly drug (xanomeline) was thought to work but with intolerable side-effects. What Karuna sought was a drug that did not cross the blood-brain barrier and would neutralize the effect of xanomeline in the body but not in the brain. They chose trospium…” (Click here to read the full text)

A research team in a laboratory, researching potential treatments for dementia-related psychosis.

Karuna Therapeutics, Inc. (NASDAQ:KRTX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, Karuna Therapeutics, Inc. (NASDAQ:KRTX) was held by 55 hedge fund portfolios, up from 41 in the previous quarter, according to our database.