In this piece, we will take a look at five biotechnology stocks to buy according to billionaire David E. Shaw. If you want to learn more about the hedge fund investor and his fund, and want to take a look at more stock picks from this list, then head over to 10 Biotech Stocks to Buy According to Billionaire David E. Shaw.
5. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
D.E. Shaw’s Stake Value: $184 million
Percentage of D.E. Shaw’s 13F Portfolio: 0.15%
Number of Hedge Fund Holders: 43
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is a biotechnology company that develops medicines for a host of diseases. These include macular degeneration, edema, diabetic retinopathy, dermatitis, and cancer. It is headquartered in Tarrytown, New York, and was founded in 1988.
Dr. Shaw’s investment firm owned 292,871 Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) shares at the end of the fourth quarter of last year. These were worth $184 million and represented 0.15% of its 13F investment portfolio’s value. During the same time period, 43 hedge funds tracked by Insider Monkey also held the company’s shares. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)’s largest shareholder among that group was Natixis Global Asset Management’s Harris Associates, which owned 1.3 million shares worth $834 million.
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) beat analyst estimates for revenue and non-GAAP EPS during its fiscal Q4, by posting $4.95 billion and $23.72, respectively. Truist lowered its price target on the company’s shares to $728 from $754 in February 2022, outlining lowered sales and headwinds for several of its products.
4. Incyte Corporation (NASDAQ:INCY)
D.E. Shaw’s Stake Value: $188 million
Percentage of D.E. Shaw’s 13F Portfolio: 0.15%
Number of Hedge Fund Holders: 40
Incyte Corporation (NASDAQ:INCY) is a biotechnology firm headquartered in Wilmington, Delaware. It develops proprietary therapeutics technologies for a variety of diseases, including treatments for cancer and leukemia.
For its fiscal fourth quarter, Incyte Corporation (NASDAQ:INCY) earned revenue of $862 million and EPS of $0.10. RBC Capital increased its price target on INCY shares to $90 from $78 in January 2022, stating that the company has a strong core portfolio of treatments and impressive sales expectations for some of its drugs.
D.E. Shaw held a $188 million stake in Incyte Corporation (NASDAQ:INCY) at the close of last year’s fourth quarter, owning 2.56 million shares. The stake represented 0.15% of the value of its 13F investment portfolio. Julian Baker and Felix Baker’s Baker Bros. Advisors was Incyte Corporation (NASDAQ:INCY)’s largest investor tracked by our database, owning a $2.47 billion stake that consisted of 33.6 million shares.
3. Pfizer Inc. (NYSE:PFE)
D.E. Shaw’s Stake Value: $196 million
Percentage of D.E. Shaw’s 13F Portfolio: 0.16%
Number of Hedge Fund Holders: 85
Pfizer Inc. (NYSE:PFE) is an American pharmaceutical and biotechnology firm that is headquartered in New York. Its treatments and products cover diseases related to cardiovascular health, various infections such as COVID-19, inflammatory diseases, and endocrine diseases.
At the end of the fourth quarter of last year, Dr. Shaw’s investment firm owned 3.32 million Pfizer Inc. (NYSE:PFE) shares that were worth $196 million and represented 0.16% of its 13F investment portfolio’s value. At the same time, 85 hedge funds tracked by Insider Monkey held stakes in the company. Pfizer Inc. (NYSE:PFE)’s largest investor among those 85 funds was Philippe Laffont’s Coatue Management, which owned 10.3 million shares worth $609 million.
Pfizer Inc. (NYSE:PFE) reported $23.84 billion in revenue and $1.08 in non-GAAP EPS for its fiscal Q4, beating analysts’ EPS estimates but missing them for revenue. In a major development last month, the United States Food and Drug Administration (FDA) approved a second booster dose of the company’s coronavirus vaccine for older adults.
2. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)
D.E. Shaw’s Stake Value: $224 million
Percentage of D.E. Shaw’s 13F Portfolio: 0.18%
Number of Hedge Fund Holders: 62
Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is a biotechnology firm headquartered in Boston, Massachusetts. It focuses on developing treatments for cystic fibrosis, kidney diseases, diabetes, and musculoskeletal pain.
D.E. Shaw owned 1.02 million Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) shares at the end of Q4 2021. These were worth $224 million on December 31 and represented 0.18% of the fund’s 13F investment portfolio value. Jim Simons’ Renaissance Technologies was Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)’s largest investor tracked by our database, owning a $357 million stake of 1.63 million shares.
Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) brought in $2 billion in revenue and $3.37 in non-GAAP EPS for its Q4, a strong set of results that beat Wall Street estimates on both counts. Jefferies maintained a $275 price target for the company in March 2022, as it stated that its high growth, high margin business is nothing short of stellar.
Tweedy, Browne Company LLC mentioned Vertex in its fourth quarter 2021 investor letter. Here is what the fund said:
“Portfolio activity during the quarter was relatively modest, and mostly on the sell side, taking advantage of the market’s advance to trim or sell positions that were trading at or above our estimates of their underlying intrinsic values. In terms of newly established positions, there were only two, (including) Vertex Pharmaceutical, a US-based pharma company specializing in therapies for cystic fibrosis (Value Fund). Both of these companies at purchase were trading at substantial discounts from our estimates of their underlying intrinsic values, and, in our view, are financially strong and well positioned for future growth.
Vertex Pharmaceutical, which was purchased by the Tweedy, Browne Value Fund in mid-November 2021, is a biotechnology company that specializes in rare diseases/orphan drugs. The company’s current strength is in the treatment of cystic fibrosis, where its therapies are the gold standard of care globally. Analysts expect that Vertex will be able to maintain its dominant position in the treatment of this disease, which afflicts 83,000 people worldwide, largely due to the effectiveness of its therapies, the fact that patent expirations for its drugs are a long way off into the future (2030-2037), and the lack of effective competition. This affords Vertex pricing power for its drugs, as there are currently no good alternative therapies. Assuming the company receives complete international and pediatric approvals, Vertex’s portfolio of approved drugs would be eligible to treat 90% of the people who have this disease. Vertex’s therapies are also not one and done drugs, but rather start in early childhood and continue throughout the patient’s lifetime. The company’s strong cash flow, in our view, should support the company’s development of even better next generation drugs to treat cystic fibrosis as well as diversify its drug pipeline to treat other rare diseases. However, many of these treatments are on the horizon or are in their incipient stages of development.”
1. Moderna, Inc. (NASDAQ:MRNA)
D.E. Shaw’s Stake Value: $257 million
Percentage of D.E. Shaw’s 13F Portfolio: 0.21%
Number of Hedge Fund Holders: 45
Moderna, Inc. (NASDAQ:MRNA) is a biotechnology firm that uses messenger ribonucleic acid (mRNA) for developing treatments for several diseases. These include infectious diseases, various cancers, cardiovascular diseases, and other maladies. The company rose to mainstream prominence thanks to its vaccine for the coronavirus pandemic, which is rated among the best in the world.
Moderna, Inc. (NASDAQ:MRNA)’s fiscal Q4 results saw it beat analysts’ revenue and GAAP EPS estimates, as the company posted $7.2 billion in revenue and $11.29 in GAAP EPS respectively. At the same time, the company announced a $3 billion share buyback as an incentive to investors who were worried about its share price.
Dr. Shaw’s D.E. Shaw had amassed a $257 million stake in Moderna, Inc. (NASDAQ:MRNA) by the end of Q4 2021, holding 1.01 million shares of the drug company. 45 hedge funds tracked by Insider Monkey’s database owned the company’s shares on December 31. Moderna, Inc. (NASDAQ:MRNA)’s largest investor among that group was Patrick Degorce’s Theleme Partners, which owned 5.02 million shares worth $1.28 billion.
Disclosure: None. You can also take a look at 12 Best Environmental Stocks to Invest In and 10 Best Nickel Stocks to Buy Now.
