In this piece, we will take a look at 10 biotech and pharma stocks to buy according to billionaire Steve Cohen. If you want to skip ahead to the top five stocks in this list, then head over to 5 Biotech and Pharma Stocks to Buy According to Billionaire Steve Cohen.
Steve Cohen is an American billionaire who is in charge of managing the hedge fund Point72 Asset Management LP. Mr. Cohen is estimated to be worth $15.9 billion as of November 2021 according to Forbes Magazine. He is also known for his association with S.A.C Capital Advisors, a now defunct hedge fund that was based in Connecticut.
The executive converted SAC Capital into Point72 in 2014, after the former pleaded guilty to insider trading and was made to pay a fine of a whopping $1.4 billion. After this, all of SAC Capital’s assets were transferred to Point72, along with a strengthened internal compliance and surveillance program.
Mr. Cohen has a degree in economics from the illustrious Wharton Business School of the University of Pennsylvania, and decades of experience in the finance industry. He started off in the sector in 1978, after graduating, as he took a role at the boutique firm Gruntal & Co, staying there for 14 years. After departing Gruntal, he created SAC Capital and oversaw its portfolio to grow to billions of dollars.
Point72 Asset Management is known for taking both long and short market positions, and also for investing in startups through its venture capital division. By the end of the third quarter of this year, Mr. Cohen’s firm had a portfolio worth a staggering $22.7 billion. Point72 returned 1.2% in the first half of this year, with the returns below those delivered by other large funds such as Citadel and Millennium Management.
The firm’s investments are spread out over a multitude of industries, but the largest portions of its portfolio are dedicated to the technology industry. Some of its biggest holdings are in technology firms such as the social media and communications giant Meta Platforms, Inc. (NASDAQ:FB), with a $295 million stake. However, since in this piece we will take a look at Mr. Cohen’s biotechnology and pharmaceutical investments, we will have to skip over the technology sector. Focusing exclusively on the medical investments reveals that Point72’s largest stakes are in Merck & Co., Inc. (NYSE:MRK), AstraZeneca PLC (NASDAQ:AZN), and Sarepta Therapeutics, Inc. (NASDAQ:SRPT). Cumulatively, the trio represents a small portion of the investment firm’s multi-billion dollar investment portfolio.
Steve Cohen
Our Methodology
In order to take a look at Mr. Cohen and Point72’s favorite investments in the biotechnology and pharmaceutical sector, we sifted through the investment firm’s Q3 2021 13-F filings. This enabled us to identify the companies, following which we took a deeper look at the selected firms’ quarterly reports, analyst ratings, hedge fund investor letters, and major shareholders. Finally, these were analyzed in tandem with other hedge fund holdings in them, courtesy of Insider Monkey’s survey of 867 hedge funds for the third quarter of this year.
10 Biotech and Pharma Stocks to Buy According to Billionaire Steve Cohen
10. Insmed Incorporated (NASDAQ:INSM)
Point72 Asset Management’s Holdings: $98.9 million
Percentage of Point72 Asset Management’s Portfolio: 0.43%
Number of Hedge Fund Holders: 18
Insmed Incorporated (NASDAQ:INSM) is a biopharmaceutical firm that focuses on developing treatments for rare diseases mostly involving the respiratory system. It was founded in 1988 and is headquartered in New Jersey, United States.
Insmed Incorporated (NASDAQ:INSM) earned $46.8 million in revenue and brought in -$0.96 in GAAP EPS in its third quarter, as it missed analyst estimates for both. Morgan Stanley set a $52 price target for the company in October 2021, highlighting that the firm’s international markets have opportunities for growth and it is on a path to post-COVID recovery.
Mr. Cohen’s Point72 Asset Management owned 3.5 million Insmed Incorporated (NASDAQ:INSM) shares by the end of Q3 2021, which were worth $98.9 million and represented 0.43% of its portfolio. 18 of the 867 hedge funds polled by Insider Monkey had holdings in the company by the end of the third quarter of this year.
Insmed Incorporated (NASDAQ:INSM)’s biggest shareholder is William Leland Edwards’ Palo Alto Investors with six million shares worth $165 million.
Insmed Incorporated (NASDAQ:INSM) is one of Mr. Cohen’s top stock picks, joining Meta Platforms, Inc. (NASDAQ:FB), Merck & Co., Inc. (NYSE:MRK), and AstraZeneca PLC (NASDAQ:AZN).
9. Perrigo Company plc (NYSE:PRGO)
Point72 Asset Management’s Holdings: $105 million
Percentage of Point72 Asset Management’s Portfolio: 0.46%
Number of Hedge Fund Holders: 23
Perrigo Company plc (NYSE:PRGO) provides healthcare solutions that enable its customers to manage conditions that do not require diagnosis or the attention of a doctor. It is headquartered in Dublin, Ireland, and was founded in 1887, making it one of the oldest companies in the world.
By Q3 2021 end, Point72 Asset Management held 2.2 million Perrigo Company plc (NYSE:PRGO) shares. These were worth $105 million and constituted 0.46% of its portfolio. Similarly, as the third quarter of this year ended, 23 of the 867 hedge funds polled by Insider Monkey had holdings in Perrigo Company plc (NYSE:PRGO).
For its third fiscal quarter, Perrigo Company plc (NYSE:PRGO) raked in a cool $1.04 billion in revenue and $0.45 in non-GAAP EPS. However, these were not enough for Wall Street, as it missed analyst estimates for both. In a November 2021 analyst note, Raymond James lowered the company’s price target to $55, outlining that it had larger concerns for the medicine company than supply chain problems.
Perrigo Company plc (NYSE:PRGO)’s largest shareholder is Stephen Dubois’ Camber Capital Management who owns 2.5 million shares worth $118 million.
8. Natera, Inc. (NASDAQ:NTRA)
Point72 Asset Management’s Holdings: $117 million
Percentage of Point72 Asset Management’s Portfolio: 0.51%
Number of Hedge Fund Holders: 50
Natera, Inc. (NASDAQ:NTRA) is an American diagnostics solutions provider that develops testing services for fetuses, analyzing miscarriages, and paternity tests among others.
Natera, Inc. (NASDAQ:NTRA) earned $158 million in revenue and -$1.63 in GAAP EPS in its third quarter, missing analyst estimates for EPS and beating them for revenue. In a November 2021 analyst note, Baird raised the diagnostics provider’s price target to $152. It reasoned that the company had maintained momentum despite the pandemic and that its products have significant future upside.
Mr. Cohen’s investment firm owned one million Natera, Inc. (NASDAQ:NTRA) shares by the end of Q3 2021. These were worth $117 million and represented 0.51% of its portfolio. During the same time period, 50 of the 867 hedge funds polled by Insider Monkey had holdings in the company.
Natera, Inc. (NASDAQ:NTRA)’s biggest shareholder is Samuel Isaly’s OrbiMed Advisors with 1.5 million shares worth $175 million.
In its Q3 2021 investor letter, Baron Funds mentioned Natera, Inc. (NASDAQ:NTRA). It stated that:
“We initiated a position in Natera, Inc., a diagnostics company with a cellfree DNA platform that enables it to detect tiny amounts of DNA in a blood sample. Natera first applied its technology platform to women’s health, where the company markets a blood test that can detect fetal DNA in the blood of pregnant women, enabling early detection of chromosomal abnormalities with a non-invasive test. Through the strength of its technology platform, clinical data, and customer service, Natera has established itself as a market leader in non-invasive prenatal testing. Natera is seeing tailwinds in its women’s health business from recently expanded insurance coverage for average risk pregnancies. Natera is now applying its technology platform to other markets, including the oncology market and the organ transplant market. In the oncology market, Natera offers a personalized blood-based DNA test called Signatera, which detects and quantifies how much residual cancer DNA remains in the body after surgery. Signatera helps physicians determine whether chemotherapy is necessary after surgery and monitor for cancer recurrence before the cancer is detectable with standard imaging. We think Signatera will change the standard of care and is in the early innings of adoption in a market we estimate to be over $15 billion. We think Natera has a long runway for growth with expanding margins and profitability.”
7. Sanofi (NASDAQ:SNY)
Point72 Asset Management’s Holdings: $120 million
Percentage of Point72 Asset Management’s Portfolio: 0.53%
Number of Hedge Fund Holders: 19
Sanofi (NASDAQ:SNY) provides pharmaceuticals, vaccines and consumer healthcare solutions in the United States and globally. Its products cover several diseases, such as those involving the heart and the nervous system.
Point72 Asset Management held 2.5 million Sanofi (NASDAQ:SNY) shares as of Q3 2021. These were worth $120 million and constituted 0.53% of its portfolio. During the same time period, 19 of the 867 hedge funds polled by Insider Monkey had holdings in the company.
At the end of its third fiscal quarter, Sanofi (NASDAQ:SNY) brought in €10.43 billion in revenue and €2.18 in non-GAAP EPS, allowing it to beat analyst EPS estimates. In a November 2021 note, HSBC increased Sanofi (NASDAQ:SNY)’s price target to €100, sharing that the earnings revealed improved cost efficiencies for the company.
Sanofi (NASDAQ:SNY)’s largest shareholder is Ken Fisher’s Fisher Asset Management who owns 17.9 million shares worth $863 million.
6. Kadmon Holdings, Inc. (NASDAQ: KDMN)
Point72 Asset Management’s Holdings: $126 million
Percentage of Point72 Asset Management’s Portfolio: 0.55%
Number of Hedge Fund Holders: 31
Kadmon Holdings, Inc. (NASDAQ:KDMN) is an American company that develops treatments for diseases involving damaged tissues. It is a subsidiary of Sanofi (NASDAQ:SNY) and is headquartered in New York, United States.
Mr. Cohen’s Point72 Asset Management owned 14 million Kadmon Holdings, Inc. (NASDAQ:KDMN) shares as the third quarter of 2021 came to an end. This stake was worth $126 million and represented 0.55% of the firm’s portfolio. Additionally, by Q3 2021 end, 31 of the 867 hedge funds polled by Insider Monkey held Kadmon Holdings, Inc. (NASDAQ:KDMN) shares.
Kadmon Holdings, Inc. (NASDAQ:KDMN) earned $14.7 million in revenue and -$0.20 in GAAP EPS for its third fiscal quarter. Its acquisition by Sanofi (NASDAQ:SNY) led to Mizuho reducing the company’s price target to $9.5 in a November 2021 analyst note.
Kadmon Holdings, Inc. (NASDAQ:KDMN)’s largest shareholder after Point72 is Alec Litowitz and Ross Laser’s Magnetar Capital which owns 9.8 million shares worth $85 million.
Kadmon Holdings, Inc. (NASDAQ:KDMN) joins Meta Platforms, Inc. (NASDAQ:FB), AstraZeneca PLC (NASDAQ:AZN), and Merck & Co., Inc. (NYSE:MRK) as one of Mr. Cohen’s hot stock picks.
To see the rest of the stocks in this list click to read 5 Biotech and Pharma Stocks to Buy According to Billionaire Steve Cohen.
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Disclosure. None. 10 Biotech and Pharma Stocks to Buy According to Billionaire Steve Cohen is originally published on Insider Monkey.
