I analyzed 10 years of Baker Bros & Perceptive Advisors 13Fs. Here is the mathematical formula they use to beat the market.

*Buffett won't touch Biotech, but Ben Graham might.* Hi all. I realized something painful last year, I suck at analyzing clinical trials. I can't read a Phase 2 Kapla-Meier curve better than a fund with 20 PhDs on staff. So I stopped trying. Instead, I built a Python model to track them. I wanted to share the logic (and the results) of my 'Priority Calculation' algorithm. It’s a value investing framework applied to a growth sector. It looks for Consensus (Safety of Principal) and Asymmetric Upside. I prioritize stocks based on a weighted score of 3 factors: 1. **Cluster Intensity:** How many Tier 1 funds own it? (Weighted 2.5x). 2. **Conviction Delta:** Did they add to the position while the price dropped? 3. **Cash Value:** Is the stock trading near its cash balance? (The Value Investing safety net). The Results: The backtest (High-Vol Strategy) returned **156%** in the last cycle. Top Holdings identified by the Algo: **$KYMR**, **$ASND**, **$INSM**. |**Strategy Name**|**Total Return**|**CAGR**|**Final Value (on $1M)**| |:-|:-|:-|:-| |**HF High-Vol Small/Midcap**|**156.3%**|**112.3%**|**$2.56M**| |**Midcap Core**|137.7%|78.1%|$2.38M| |**Clinical Growth**|133.9%|76.2%|$2.34M| |**Conservative HF Quality**|76.5%|46.0%|$1.76M| In the next post, I'll break down how to value these 0 Revenue companies using the Cash-Adjusted Priority Score. Also, just to let youknow, here is a full version of [all four baskets](https://www.biopharmawatch.com/bpw-portfolio) Post your biotech bag-holds. I’ll run them through this bio-focused hedge fund portfolio.