In this piece, we will take a look at the top 5 pharmaceutical stocks to buy according to Peter Kolchinsky’s RA Capital. If you want a comprehensive view of Dr. Kolchinsky’s portfolio and his investment strategy, head on over to 15 Pharmaceutical Stocks to Buy According to Peter Kolchinsky’s RA Capital.
5. Forma Therapeutics Holdings, Inc. (NASDAQ:FMTX)
RA Capital Management’s Stake Value: $208.9 million
Percentage of RA Capital Management’s 13F Portfolio: 2.89%
Number of Hedge Fund Holders: 16
Forma Therapeutics Holdings, Inc. (NASDAQ:FMTX) is an American company that focuses on developing treatments for liver and cancer diseases. It was founded in 2007 and is headquartered in Watertown, Massachusetts.
Forma Therapeutics Holdings, Inc. (NASDAQ:FMTX) earned -$0.91 in its GAAP EPS for the third quarter, beating analyst estimates. The company’s share price target was lowered to $53 by H.C. Wainwright in an August 2021 analyst note.
Dr. Kolchinsky’s RA Capital held 9 million Forma Therapeutics Holdings, Inc. (NASDAQ:FMTX) shares worth $208.9 million which represented 2.89% of its portfolio during Q3. During Q3 2021, 16 of the 873 hedge funds polled by Insider Monkey had holdings in the company.
4. Adagio Therapeutics, Inc. (NASDAQ:ADGI)
RA Capital Management’s Stake Value: $225 million
Percentage of RA Capital Management’s 13F Portfolio: 3.12%
Number of Hedge Fund Holders: 12
Adagio Therapeutics, Inc. (NASDAQ:ADGI) is a young American company founded in 2020 that aims to develop antibody-based treatments for infectious diseases. The company is currently developing a treatment for Covid-19.
Dr. Kolchinsky’s RA Capital held 5.3 million Adagio Therapeutics, Inc. (NASDAQ:ADGI) shares by the end of this year’s third quarter. These were worth $225 million and represented 3.12% of its portfolio.
Adagio Therapeutics, Inc. (NASDAQ:ADGI) earned -$0.98 in GAAP EPS during its third quarter, missing analyst estimates.
3. Eliem Therapeutics, Inc. (NASDAQ:ELYM)
RA Capital Management’s Stake Value: $236 million
Percentage of RA Capital Management’s 13F Portfolio: 3.27%
Number of Hedge Fund Holders: 8
Eliem Therapeutics, Inc. (NASDAQ:ELYM) is an American company that develops treatments for neurological diseases such as major depressive disorder, seizures, anxiety, and epilepsy. It was founded in 2018 and is headquartered in Redmond, Washington.
Eliem Therapeutics, Inc. (NASDAQ:ELYM) earned -$0.70 in GAAP EPS during its third quarter. The company’s price target was set to $33 by SVB Leernik in a September 2021 analyst note which saw the firm praise Eliem Therapeutics, Inc. (NASDAQ:ELYM)’s chances of clearing regulatory hurdles.
Dr. Kolchinsky’s investment firm held 13 million Eliem Therapeutics, Inc. (NASDAQ:ELYM) shares worth $236 million and 3.27% of its portfolio in Q3.
2. Novavax, Inc. (NASDAQ:NVAX)
RA Capital Management’s Stake Value: $434 million
Percentage of RA Capital Management’s 13F Portfolio: 6.02%
Number of Hedge Fund Holders: 35
Novavax, Inc. (NASDAQ:NVAX) is a vaccine developer that is targeting diseases such as Covid-19, influenza, Ebola, and other respiratory viruses. It was founded in 1987 and is headquartered in Gaithersburg, Maryland.
Dr. Kolchinsky’s RA Capital held 2 million Novavax, Inc. (NASDAQ:NVAX) shares in the third quarter of this year. These were worth $434 million and represented 6.02% of the firm’s investment portfolio.
Novavax, Inc. (NASDAQ:NVAX) earned $178 million in revenue and -$4.31 in GAAP EPS during its third quarter. At a September conference, the company outlined that it plans to double its COVID-19 vaccine manufacturing capacity to ship 2 billion doses next year. B. Riley kept the company’s price target at $305 in a November 2021 analyst note, highlighting that more regulatory approvals were headed their way this year.
1. Ascendis Pharma A/S (NASDAQ:ASND)
RA Capital Management’s Stake Value: $1.17 billion
Percentage of RA Capital Management’s 13F Portfolio: 16.31%
Number of Hedge Fund Holders: 23
Ascendis Pharma A/S (NASDAQ:ASND) is a Danish company developing therapeutics for growth hormone deficiency, hypoparathyroidism, and oncology. It was founded in 2006 and is headquartered in Hellerup, Denmark.
Ascendis Pharma A/S (NASDAQ:ASND) earned €1 million in revenue and -€1.47 in GAAP EPS during its third quarter.
Dr. Kolchinsky’s firm held 7.3 million Ascendis Pharma A/S (NASDAQ:ASND) shares in Q3, which were worth $1.17 billion and made up for 16.31% of its portfolio.
In its first quarter 2021 investor letter, Artisan Partners had the following to say about Ascendis Pharma A/S (NASDAQ:ASND):
“Among our bottom Q1 contributors was Ascendis Pharma. Ascendis Pharma underperformed in sympathy with the broader biotech sector as drug price legislation discussions in Washington have resumed. We believe the company’s fundamental outlook remains very positive as its TransCon technology platform—which enables protein-based medicines to be delivered in a sustainedrelease manner—yields promising, relatively low-risk new drug candidates. The company’s first product, TransCon hGH, the first weekly pediatric growth hormone injection, is expected to be approved by the FDA in the coming quarters. Two other promising rare endocrinology disease medicines are in clinical trials, with TransCon PTH for hypoparathyroidism already having shown compelling Phase II data in 2020. We believe these endocrinology products alone make Ascendis an attractive long-term investment opportunity, even before considering the company’s early stage cancer pipeline and its ~40% equity ownership in VISEN Pharmaceuticals, a Chinese drug developer. Furthermore, we believe drug price legislation will be manageable for Ascendis, which is far more dependent on creating new medicines than on raising the price of existing products.”
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