Laughing Water Capital Backs AnaptysBio Amid GSK Royalty Dispute
Laughing Water Capital has taken a new position in AnaptysBio, anticipating a lucrative settlement or acquisition as the biotech firm pursues a royalty dispute trial against GSK.
Laughing Water Capital disclosed a new investment in AnaptysBio in its second-quarter 2026 investor letter. The firm highlighted the clinical-stage biotechnology company as a special situation poised for a rapid resolution.
The investment thesis centers on a commercial dispute between AnaptysBio and GSK. AnaptysBio has accused GSK of violating the terms of their agreement regarding Jemperli, a fast-growing cancer drug. A trial over the matter is scheduled for July 14 to 17.
Following a recent taxable spinoff of its developmental drug assets, AnaptysBio operates as an asset-light royalty company. It currently collects revenue from Jemperli sales, which GSK commercializes. Laughing Water Capital noted it acquired shares at a discount to the present value of these future royalty payments.
The fund sees significant asymmetric upside in the dispute. While a trial victory allowing AnaptysBio to recover the entirety of Jemperli is considered a low probability event, the firm estimates it could drive shares to nearly $300.
A more likely outcome involves GSK settling before the trial or acquiring AnaptysBio outright. The fund projects these scenarios would generate 50 to 80 percent upside from its average purchase price below $60 per share.
AnaptysBio shares closed at $69.81 on July 13, valuing the company at $2.07 billion. The stock has gained 293.28 percent over the past 52 weeks, including a 21.18 percent rise in the last month alone.
The AnaptysBio position joins a portfolio that delivered strong recent results. Laughing Water Capital reported a 39.8 percent net return for its Class A investments in the second quarter, bringing year-to-date returns to 33.6 percent.
The fund attributed its outperformance against the S&P 500 Total Return and Russell 2000 indices to three of its top five holdings being acquired. It emphasized that patience in inefficient markets continues to yield long-term profits from undervalued equities.
