Bihua Chen, founder and portfolio manager at Cormorant Asset Management, said on Monday she likes Reata Pharmaceuticals for the drug it's developing to fight kidney disease.
The drug, called bardoxolone, has "striking efficacy," the hedge-fund manager said at the Sohn Conference in New York.
Shares of Reata Pharmaceutical jumped more than 5% after Chen revealed her bet on the drugmaker.
Chen pointed out there are concerns about the new drug that could lead to heart failure and weight loss, but she said based on her research on the drug trials, she's not worried about the safety issue.
"I think its safety profile is real and sustainable," she said.
Reata's stock has surged more than 49% year to date.