In this article we discuss the 5 best pharmaceutical stocks to buy according to billionaire Kerr Neilson. If you want to read our detailed analysis of Neilson’s history and hedge fund performance, go directly to the 10 Best Pharmaceutical Stocks to Buy According to Billionaire Kerr Neilson.
5. Zai Lab Limited (NASDAQ: ZLAB)
Neilson’s Stake Value: $7,262,000
Percent of Kerr Neilson’s 13F Portfolio: 0.16%
Number of Hedge Fund Holders: 30
Zai Lab Limited (NASDAQ: ZLAB) is a Chinese biopharmaceutical company that specialises in discovering, developing, licencing, and commercializing therapeutics for treatment of oncology, autoimmune, and infectious diseases.
Early this year, the company announced its financial results for the second half and full year of 2020 in which it reported $49.0 million in total revenues for the FY 2020 compared to $13.0 million reported in the FY 2019. During the year, biopharmaceutical company’s sales of Optune amounted to $16.4 million compared to $6.4 million reported in the previous year. Zai Lab reported a net loss of $268.9 million or $3.46 per share in FY2020 compared to a net loss of $195.1 million or $3.03 per share reported in FY2019.
Zai Lab Limited (NASDAQ: ZLAB) has also announced expansion of its partnership with Turning Point Therapeutics, Inc. (NASDAQ: TPTX), a precision oncology company that specialises in development of next-generation therapies that target genetic drivers of cancer. Under the new agreement, Zai Lab has been granted exclusive rights to develop and commercialise TPX-0022, Turning Point’s MET, SRC and CSF1R inhibitor in Greater China.
In return, Turning Point will be paid a $25 million upfront with an additional $336 million to be paid in form of development, regulatory and sales-based milestone payments. Under the terms of the agreement, Turning Point will also be paid royalties based on annual net sales of TPX-0022 in the region that will also include Hong Kong, Macau and Taiwan.
4. BioNTech SE (NASDAQ: BNTX)
Neilson’s Stake Value: $16,641,000
Percent of Kerr Neilson’s 13F Portfolio: 0.38%
Number of Hedge Fund Holders: 17
BioNTech SE (NASDAQ: BNTX) is a German biotechnology company with its headquarters in Mainz. The company specialises in the development and production of active immunotherapies for patient-customized treatment options.
The company reported total revenues of €345.4 million for the Q3 2020, and increase from the €28.0 million reported during the same period in 2019. For the FY 2020, the company reported total revenues of around €482.3 million compared to €108.6 million reported for the full financial year 2019.
BioNTech SE (NASDAQ: BNTX) reported a net profit of €366.9 million in Q3 FY2021 compared to €58.2 million net loss that was registered in Q3 FY2019. The company reported a net profit of €15.2 million for the full financial year 2020 compared to a net loss of €179.2 million reported in the financial year 2019.
In March 2021, the biotechnology company made a breakthrough announcement in the fight against COVID-19 after releasing evidence that showed Pfizer-BioNTech COVID-19 Vaccine (BNT162b2) led to lower incidence rates of COVID-19 disease among vaccinated individuals. The new data confirms another set of recently released data that proved the effectiveness of the vaccine in preventing SARS-CoV-2 infections, COVID-19 cases, reducing hospitalizations, and deaths. The new set of data is expected to boost the vaccination campaign being undertaken by countries around the world and elevate the success level of the fight against the pandemic.
BioNTech SE (NASDAQ: BNTX) also announced plans by the U.S. Food and Drug Administration to authorize Pfizer Inc and BioNTech SE’s COVID-19 vaccine for adolescents between the age of 12 and 15 years in the coming weeks.
3. Intellia Therapeutics, Inc. (NASDAQ: NTLA)
Neilson’s Stake Value: $2,446,000
Percent of Kerr Neilson’s 13F Portfolio: 0.05%
Number of Hedge Fund Holders: 30
Intellia Therapeutics, Inc. (NASDAQ: NTLA) is a genome editing company that specializes in the development of curative therapeutics using CRISPR/Cas9 technology both in vivo and ex vivo. NTLA ranks 3rd in the list of best pharmaceutical stocks to buy according to billionaire Kerr Neilson.
Intellia recently announced its financial results for the Q1 FY 2021 with a drop in collaboration revenue by $6.5 million to $6.4 million. Collaboration revenue in Q1 FY 2020 amounted to $12.9 million. The drop is attributed to the $5.0 million milestone payment from Novartis Institutes for BioMedical Research, Inc. (Novartis) for the IND submission of OTQ923 in 2020.
During the quarter, net loss totaled to $42.2 million compared to $31.8 million reported during the same period last year.
Early this year, Intellia Therapeutics, Inc. (NASDAQ: NTLA) announced a number of updates, including the continued advancement of global Phase 1 study of NTLA-2001 which is being developed as curative single-course therapy for transthyretin amyloidosis (ATTR). The company intends to submit an IND or IND-equivalent in mid-2021 for NTLA-5001 which is being developed for the treatment of acute myeloid leukemia (AML).
2. Blueprint Medicines Corporation (NASDAQ: BPMC)
Neilson’s Stake Value: $3,042,000
Percent of Kerr Neilson’s 13F Portfolio: 0.06%
Number of Hedge Fund Holders: 38
Blueprint Medicines Corporation (NASDAQ: BPMC) is a precision therapy company that focuses on developing treatments for various types of cancer. BPMC ranks 2nd in the list of best pharmaceutical stocks to buy according to billionaire Kerr Neilson.
The company recently announced financial results for the Q1 2021, with revenues amounting to $21.6 million. This includes $12.6 million in collaboration revenues, $1.8 million of net product revenues from sales of GAVRETO, and $7.1 million of net product revenues from sales of AYVAKIT/AYVAKYT.
During the quarter, the company reported $99.7 million or $1.72 per share in net loss compared to $111.0 million or $2.11 per share in net loss reported during the same period a year later.
Blueprint Medicines (NASDAQ:BPMC) recently announced data for its systemic mastocytosis (SM) program, which show that its Ayvakit (avapritinib) treatment saw a complete remission in 75% of the patients in trial.
Earlier in March, National Medical Products Administration approved Gavreto to treat adult patients with non-small cell lung cancer. Gavreto was discovered by Blueprint, which later collaborated with CStone to devlop and commercialize pralsetinib.
1. Amgen Inc. (NASDAQ: AMGN)
Neilson’s Stake Value: $82,000
Percent of Kerr Neilson’s 13F Portfolio: 0.01%
Number of Hedge Fund Holders: 49
Amgen Inc. (NASDAQ: AMGN) is a U.S based multinational biopharmaceutical company committed to unlocking the potential of biology for patients suffering from serious illnesses. The company recently announced that Humira, the equivalent of AbbVie’s blockbuster rheumatoid arthritis drug, is now available in Canada. The drug is used in the treatment of 11 chronic inflammatory conditions.
The company’s AMGEVITA is also available a prefilled pen and a prefilled syringe and comes in different quantities to meet various prescriptions.
Amgen recently announced its financial results for Q1 2021 with 4% increase in revenue to $5.9 billion. The increase is mainly attributed to lower net selling prices partially by increase in trading volume. The results further point to the growing challenges being presented by the COVID-19 pandemic with regard to access to medical facilities.
Amgen reported a 5% drop in product sales despite recording a double digit growth in trading volumes. During the quarter, Amgen’s GAAP earnings per share (EPS) dropped by 8% to $2.83 mainly due to drop in revenues. The company’s GAAP operating income dropped 10% to 2.1 billion while GAAP operating margin dropped by nine percentage points to 38.1%.
Amgen Inc. (NASDAQ: AMGN) recently announced the completion of its tender offer to buy all outstanding shares of common stock of Five Prime Therapeutics. The shares were priced at $38.00 per share in cash, and Amgen is expected to pay around $1.9 billion to complete the deal.
Distillate Capital, in their Q4 2020 investor letter, said that they are optimistic in Amgen Inc. (NASDAQ: AMGN), and that they acquired a position in the company. Here is what Distillate Capital has to say about Amgen Inc. in its letter:
“One of the biggest additions to the portfolio in the rebalance was Amgen Inc. The company underperformed the S&P 500 Index last quarter even though its free cash flow estimates increased. Because the portfolio’s weighting methodology is linked to free cash flow, position sizes increased to reflect improving fundamentals relative to prices, and the more attractive valuations that result.”
You can also take a peek at Billionaire Stan Druckenmiller’s Top 10 Stock Picks and John Rogers’ Top 10 Stock Picks.
