LAB

Standard BioTools ($LAB): 'Biotech Warren Buffett' Buys 10M Shares Despite 50% Plunge, Illumina Partnership Adds Fuel

09/12/2025 01:07

Casdin Partners, a renowned biotech hedge fund, continues accumulating shares of Standard BioTools ($LAB) even as the stock has fallen nearly 50% over the past year. What makes this particularly noteworthy is the timing and scale of their purchases. For investors, understanding what these moves by the 'masters of bottom fishing' might signal could prove crucial. Standard BioTools is a small-cap biotechnology company with approximately $510 million in market capitalization, specializing in life science research equipment and materials. Their core business focuses on single-cell analysis instruments and microfluidic chip technology—essential tools for personalized medicine and drug development research. Competitors include 10x Genomics and Fluidigm, and the company targets niche markets within the digitalization trend of life sciences research. Casdin Partners Master Fund, led by Eli Casdin, is a biotech-focused hedge fund often called the 'Warren Buffett of biotech' for their long-term value investing approach. They began aggressive buying in August 2024, right after the stock plummeted 36% from $2.24 to $1.42. During August alone, they purchased 7.8 million shares at an average price of $1.70, investing approximately $11.7 million. Even more striking was their February 28, 2025 transaction. Near the stock's low point of $1.06, they bought a massive 4.82 million shares in a single transaction worth $5.13 million. This volume was more than 10 times the daily average trading volume, suggesting not mere portfolio adjustment but a conviction-driven investment decision. In contrast, company executives including CEO Michael Egholm sold small amounts in May 2025. However, these were tax-related sales following restricted stock unit (RSU) exercises, unrelated to their actual investment outlook. The RSU grants themselves indicate that long-term incentive systems for management remain active. Casdin Partners has continued buying recently, purchasing an additional 1.33 million shares across August and September. Their cumulative holdings are now estimated to be substantial. Why do they keep buying? First, Standard BioTools shows improving fundamentals. Q2 2024 revenue increased 35% year-over-year, and Q3 surged 77%, beating analyst expectations. Per-share losses also improved dramatically from 22 cents to 7 cents. The biotech equipment market appears to be recovering as demand normalizes post-COVID-19. Second, the strategic partnership with Illumina announced in June. The global leader in genomic analysis equipment acquiring Standard BioTools shares signals technology validation and potential for joint product development and market expansion. Third, valuation attractiveness. The current price of $1.33 represents a 50% discount from 2024 highs, while analysts maintain an average target price of $1.93, suggesting 45% upside potential. Given the revenue growth trajectory, the stock appears significantly undervalued. Risks remain, however. Biotech equipment markets are economically sensitive and vulnerable to R&D spending cuts. As a small company, major customer losses or new product delays could significantly impact the stock price. The August 2024 crash following earnings demonstrates this vulnerability. Yet considering Casdin Partners' investment philosophy, they appear focused on long-term value rather than short-term volatility. Eli Casdin's 20-year biotech industry experience, including successful investments in Gilead Sciences and Vertex Pharmaceuticals, lends credibility to their judgment. Key upcoming catalysts include Q3 earnings and concrete progress on the Illumina partnership. Continued revenue growth and meaningful partnership developments could drive significant upside momentum from current levels. Conversely, disappointing results or partnership delays could pressure the stock further. In conclusion, Standard BioTools trades near its lows, and continued buying by sophisticated investors provides a positive signal. However, given biotech sector volatility, a dollar-cost averaging or long-term investment approach would be prudent.