10 Biotech Stocks to Buy Today According to Kerr Neilson’s Platinum Asset Management

Published on April 20, 2022 at 2:25 pm by Ramish Cheema in Hedge Funds, News

In this piece, we will take a look at the ten biotechnology stocks to buy today according to Kerr Neilson’s Platinum Asset Management.

Platinum Asset Management is an Australian hedge fund based out of Sydney, New South Wales. It was founded by Mr. Kerr Neilson in 1994, making it one of the younger hedge funds out there. The fund has made Mr. Neilson a billionaire after it sold its stock on the market.

Platinum Asset Management is one of the few hedge funds outside of the United States and the United Kingdom that has managed to make a name for itself in a relatively short time period. Its founder was born in South Africa in 1950 and he also completed his undergraduate education in the country. After graduation, he worked at different financial institutions in Australia and United Kingdom, before settling down to start his hedge fund in 1994.

Platinum Investment Management offers regional and industry specific funds alongside exposures to global stocks. While the fund is known for Mr. Neilson’s ‘contrarian’ approach, it does not exclusively limit itself to it. Its funds have the authority to engage in short selling for instance. Short selling refers to the practice of borrowing a company’s shares and selling them on the open market with the hopes of the share price dropping.

Some of the funds that the firm manages are the Platinum International Fund, the Platinum Unhedged Fund, the Platinum International Health Care Fund, the Platinum World Portfolio – International Fund, and the Platinum International Technology Fund. Additionally, it also has two funds and two investment companies, Platinum Capital Limited and Platinum Asia Investments Limited which have floated their shares on the Australian Securities Exchange (ASX).

Platinum Asset Management’s portfolio was worth $3.5 billion as of December 2021, and some of the renowned companies in it are Meta Platforms, Inc. (NASDAQ:FB), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG).

10 Biotech Stocks to Buy Today According to Kerr Neilson's Platinum Asset Management

Kerr Neilson of Platinum Asset Management

Our Methodology

In order to pick Mr. Neilson’s favorite biotechnology companies, we took a look at his firm’s filings for the fourth quarter of last year. Once the companies were identified, we studied their quarterly earnings, analyst reports, investor letters, large shareholders, and hedge fund sentiment courtesy of Insider Monkey’s Q4 2021 survey of 924 hedge funds.

10. Albireo Pharma, Inc. (NASDAQ:ALBO)

Platinum Asset Management’s Stake Value: $7 million

Percentage of Platinum Asset Management’s 13F Portfolio: 0.2%

Number of Hedge Fund Holders: 15

Albireo Pharma, Inc. (NASDAQ:ALBO) is an American biotechnology company headquartered in Boston, Massachusetts. It is involved in producing bile for treating liver diseases. These diseases cover those affecting both children and adults.

Platinum Asset Management owned 315,662 Albireo Pharma, Inc. (NASDAQ:ALBO) shares during the fourth quarter of last year. These were worth $7 million and they represented 0.2% of its investment portfolio. Insider Monkey’s Q4 2021 survey of 924 hedge funds revealed that 15 had bought the company’s shares.

For its fiscal fourth quarter, Albireo Pharma, Inc. (NASDAQ:ALBO) reported $32 million in revenue and -$0.57 in GAAP EPS. This marked a significant revenue growth over the $2.72 million that it had posted for the year-ago quarter. Wedbush set a $75 price target for the company in March 2022 as it added the stock to its Best Ideas list.

Alongside Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:FB), and Alphabet Inc. (NASDAQ:GOOG), Albireo Pharma, Inc. (NASDAQ:ALBO) is one of Platinum Asset Management’s favorite stocks.

9. Coherus BioSciences, Inc. (NASDAQ:CHRS)

Platinum Asset Management’s Stake Value: $8.5 million

Percentage of Platinum Asset Management’s 13F Portfolio: 0.23%

Number of Hedge Fund Holders: 21

Coherus BioSciences, Inc. (NASDAQ:CHRS) is a biopharmaceutical company based out of Redwood City, California, United States. It is known for developing products involved in the treatment of several kinds of cancers. The firm has partnerships with several companies in the U.S. and China for licensing products.

Coherus BioSciences, Inc. (NASDAQ:CHRS) raked in $73 million in revenue and -$0.46 in non-GAAP EPS during its fiscal fourth quarter, in a mixed set of results that saw it beat analyst EPS estimates but miss them for revenue. The company’s treatment for small cell lung cancer was granted approval by the U.S. Food and Drug Administration (FDA) in April 2022.

Mr. Neilson’s hedge fund owned 535,108 Coherus BioSciences, Inc. (NASDAQ:CHRS) shares as Q4 2021 came to an end. These were worth $8.5 million and represented 0.23% of its investment portfolio. During the same time period, Insider Monkey’s 924 hedge fund survey revealed that 21 had owned the company’s shares.

Coherus BioSciences, Inc. (NASDAQ:CHRS)’s largest investor is Joseph Edelman’s Perceptive Advisors which owns 5.4 million shares worth $86 million.

8. Zai Lab Limited (NASDAQ:ZLAB)

Platinum Asset Management’s Stake Value: $8.8 million

Percentage of Platinum Asset Management’s 13F Portfolio: 0.24%

Number of Hedge Fund Holders: 32

Zai Lab Limited (NASDAQ:ZLAB) is a Chinese biotechnology company that develops treatments for a wide variety of diseases. These include cancers, immune system diseases, infectious diseases, and neurological disorders. Its commercialized products are involved in the treatment of skin diseases, kidney diseases, and several kinds of tumors.

For the fourth quarter of last year, Platinum Asset Management’s stake in Zai Lab Limited (NASDAQ:ZLAB) was worth $8.8 million. It came via the firm owning 140,591 shares and constituted 0.24% of its investment portfolio. Insider Monkey analyzed 924 hedge fund holdings for the same time period and discovered that 32 contained the company’s stock.

By the end of its latest fiscal year, Zai Lab Limited (NASDAQ:ZLAB) reported $144 million in revenue and $0.73 in GAAP EPS, missing analyst estimates for both metrics. This was despite the fact that the revenue marked 194% annual growth. Citi set a $198 price target for the company in March 2022, stating that a schizophrenia treatment was unaccounted for in Wall Street estimates.

Andreas Halvorsen’s Viking Global is Zai Lab Limited (NASDAQ:ZLAB)’s largest investor. It owns three million shares worth $189 million.

ClearBridge Investments mentioned the company in its fourth quarter 2021 investor letter. Here is what the fund said:

“Economies in Asia, meanwhile, are taking the opposite approach on stimulus, with China lowering its reserve requirement ratio for banks to support flagging growth in the world’s second-largest economy. Japan’s new government passed a large stimulus bill after its economy contracted in the third quarter. Despite these actions, sentiment remains decidedly negative in these regions. Our underweight to Japan proved beneficial during the quarter while our single holding in China – biotechnology company Zai Lab – sold off sharply mostly due to generally weak sentiment around Chinese health care stocks.”

7. Cogent Biosciences, Inc. (NASDAQ:COGT)

Platinum Asset Management’s Stake Value: $9 million

Percentage of Platinum Asset Management’s 13F Portfolio: 0.25%

Number of Hedge Fund Holders: 18

Cogent Biosciences, Inc. (NASDAQ:COGT) is a biotechnology company headquartered in Cambridge, Massachusetts, United States. The company develops treatments for genetic diseases such as mastocytosis and other stomach tumors.

Cogent Biosciences, Inc. (NASDAQ:COGT) posted a net loss of $24.9 million by the end of its fiscal fourth quarter. For the same time period, the company revealed that it had cash and cash equivalents of $219 million. Piper Sandler set a $22 price target for the company in March 2022, as it stated that a treatment program was on track and the data was positive.

Mr. Neilson’s hedge fund owned one million Cogent Biosciences, Inc. (NASDAQ:COGT) shares as part of its fourth quarter 2021 investment portfolio. These were worth $9 million and represented 0.25% of the portfolio. An Insider Monkey survey of 924 hedge funds for the same time period revealed that 18 funds had also invested in the firm.

6. Pardes Biosciences, Inc. (NASDAQ:PRDS)

Platinum Asset Management’s Stake Value: $17 million

Percentage of Platinum Asset Management’s 13F Portfolio: 0.49%

Number of Hedge Fund Holders: 18

Pardes Biosciences, Inc. (NASDAQ:PRDS) is another American biopharmaceutical firm. It exclusively focuses on developing treatments for life threatening diseases. These include severe respiratory diseases such as the coronavirus 2.

Platinum Asset Management’s stake in Pardes Biosciences, Inc. (NASDAQ:PRDS) for Q4 2021 was worth $17 million, and it came through the firm owning one million shares. The investment accounted for 0.49% of Platinum Asset Management’s portfolio. Insider Monkey took a look at the holdings of 924 hedge funds for the same time period and found out that 18 had also bought the company’s shares.

Pardes Biosciences, Inc. (NASDAQ:PRDS) revealed in March 2022 that by the end of its latest fiscal year, it had a GAAP EPS of -$10.13 and cash and cash equivalents worth $268 million. SVB Leerink set an $18 price target for the company in March 2022, outlining that the company has several crucial treatments in development, including those for the COVID-19 coronavirus.

Pardes Biosciences, Inc. (NASDAQ:PRDS) joins Meta Platforms, Inc. (NASDAQ:FB), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG) as a top Kerr Neilson stock pick.

5. Icosavax, Inc. (NASDAQ:ICVX)

Platinum Asset Management’s Stake Value: $18.6 million

Percentage of Platinum Asset Management’s 13F Portfolio: 0.51%

Number of Hedge Fund Holders: 10

Icosavax, Inc. (NASDAQ:ICVX) is a biotechnology company that is headquartered in Seattle, Washington, United States. It focuses its efforts on developing treatments for infectious diseases. These include respiratory viruses such as the SARS COV-2. Its SARS COV-2 drug is currently under clinical trials.

Mr. Neilson’s hedge fund owned 816,366 Icosavax, Inc. (NASDAQ:ICVX) shares by the end of the fourth quarter of last year. These were worth $18.6 million and represented 0.51% of the firm’s investment portfolio. During the same time period, 10 out of the 924 hedge funds polled by Insider Monkey had also invested in the company.

Icosavax, Inc. (NASDAQ:ICVX) brought in $2 million in revenue and -$0.46 in GAAP EPS for its fiscal fourth quarter, for a mixed bag of results that saw it beat revenue but miss EPS estimates. Evercore ISI slashed the company’s share price target to $10 from $50 in March 2022 after the company’s vaccine failed to meet expectations.

Icosavax, Inc. (NASDAQ:ICVX)’s largest investor is Peter Kolchinsky’s RA Capital Management which owns 5.7 million shares worth $132 million.

4. Prometheus Biosciences, Inc. (NASDAQ:RXDX)

Platinum Asset Management’s Stake Value: $20.6 million

Percentage of Platinum Asset Management’s 13F Portfolio: 0.57%

Number of Hedge Fund Holders: 13

Prometheus Biosciences, Inc. (NASDAQ:RXDX) is a biopharmaceutical firm that is involved in the discovery and development of treatments for inflammatory bowel diseases. These diseases include ulcerative colitis, interstitial lung disease, and other diseases.

Prometheus Biosciences, Inc. (NASDAQ:RXDX) reported $90 million in net loss for its latest fiscal year alongside cash and cash equivalents that were worth $257 million for the 12 months ending in December 2021. Wells Fargo raised the company’s price target to $53 from $42 in March 2022 as it stated that proficient management execution and optimistic expectations from a colitis drug were positives for the company.

Platinum Asset Management held 521,529 Prometheus Biosciences, Inc. (NASDAQ:RXDX) during Q4 2021 for a $20.6 million stake that represented 0.57% of its investment portfolio. 13 of the 924 hedge funds surveyed by Insider Monkey for the same time period had invested in the firm.

Joseph Edelman’s Perceptive Advisors is Prometheus Biosciences, Inc. (NASDAQ:RXDX) ‘s largest investor through a $125 million stake that comes via 3 million shares.

3. IDEAYA Biosciences, Inc. (NASDAQ:IDYA)

Platinum Asset Management’s Stake Value: $20.8 million

Percentage of Platinum Asset Management’s 13F Portfolio: 0.57%

Number of Hedge Fund Holders: 14

IDEAYA Biosciences, Inc. (NASDAQ:IDYA) is a cancer treatment developer and provider that is headquartered in San Francisco. California, United States. The company’s treatments target several different kinds of cancers such as those resulting from genetic mutations or specific molecular signatures.

By the end of the fourth quarter of last year, Platinum Asset Management owned a $20.8 million stake in IDEAYA Biosciences, Inc. (NASDAQ:IDYA). This came in the form of 881,085 shares and it represented 0.57% of the firm’s investment portfolio. Insider Monkey’s Q4 2021 survey of 924 hedge funds revealed that 14 had invested in the firm.

For its fiscal fourth quarter, IDEAYA Biosciences, Inc. (NASDAQ:IDYA) revealed that it had earned $2.96 million in revenue and -$0.47 in GAAP EPS, in a weak set of results that saw it miss analyst estimates for both metrics. Stifel lowered its price target to $17 from $20 in March 2022, outlining that a lower probability of success for a cancer treatment influenced the decision.

IDEAYA Biosciences, Inc. (NASDAQ:IDYA)’s largest investor is David Witzke and Michael Gregory’s Avidity Partners Management which owns 2.5 million shares worth $60 million.

2. Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX)

Platinum Asset Management’s Stake Value: $24.7 million

Percentage of Platinum Asset Management’s 13F Portfolio: 0.68%

Number of Hedge Fund Holders: 14

Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) is an all purpose company that combines various disciplines such as biology, chemistry, data analytics, and others to create treatments for diseases such as colitis, ovarian cancer, gangliosidosis, lung cancers, and more.

Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) reported -$0.38 in GAAP EPS for its fourth fiscal quarter alongside revenue of $2.55 million. Following the earnings results, BofA slashed its stock rating to Neutral from Buy and kept a $10 price target for the company.

Mr. Neilson’s hedge fund had owned 1.4 million Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) shares during the three months ending in December 2021. Insider Monkey’s fourth quarter of 2021 survey of 924 hedge funds listed down 14 as having bought a stake in the company.

Benjamin A. Smith’s Laurion Capital Management is Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX)’s largest investor. It owns a $67 million stake that comes via 3.9 million shares.

1. Gilead Sciences, Inc. (NASDAQ:GILD)

Platinum Asset Management’s Stake Value: $81 million

Percentage of Platinum Asset Management’s 13F Portfolio: 2.26%

Number of Hedge Fund Holders: 54

Gilead Sciences, Inc. (NASDAQ:GILD) is a biotechnology company headquartered in Foster City, California. The company develops treatments for several diseases such as HIV/AIDS, COVID-19, and liver diseases.

For its Q4 2021 portfolio, Platinum Asset Management owned 1.1 million Gilead Sciences, Inc. (NASDAQ:GILD) shares that were worth $81 million and represented 2.26% of its investment portfolio. For the same time period, 54 of the 924 hedge funds polled by Insider Monkey had invested in the firm.

By the end of its fiscal Q4, Gilead Sciences, Inc. (NASDAQ:GILD) had earned $7.2 billion in revenue and $0.26 in non-GAAP EPS, beating analyst estimates for a strong set of results. Piper Sandler increased the company’s price target to $72 from $71 in April 2022, as it highlighted that cautious optimism due to the FDA lifting its hold for a drug, which could translate into gains.

Gilead Sciences, Inc. (NASDAQ:GILD)’s largest investor is John Allison’s Unio Capital which owns 138,307 shares worth $782 million.

ClearBridge Investments mentioned the company in its fourth quarter 2021 investor letter. Here is what the fund said:

“Other pharma companies are providing solutions as well. Biopharmaceutical company Gilead Sciences’ remdesivir, sold under the brand name Veklury, is a broad-spectrum antiviral medication administered by intravenous infusion; it can shorten the time to recovery in hospitalized patients and reduce the risk of hospitalization and death in non-hospitalized patients.”