Alex Denner’s Sarissa Capital Management recently disclosed its stock picks for the fourth quarter of 2014 in a 13F Form filed with the U.S. Securities and Exchange Commission. In addition to revealing Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) as its largest position, the investment firm’s biggest bets last quarter also included Quest Diagnostics Inc (NYSE:DGX) and Amgen, Inc. (NASDAQ:AMGN). Furthermore, in a separate filing it Mr. Dinner’s fund disclosed its intention to remove the CEO and Chairman of Ariad Pharmaceuticals Harvey Berger.
Sarissa Capital Management was launched by Alexander J. Denner in 2012 and is currently headquartered in Greenwich, Connecticut. The hedge fund invests primarily in stocks of companies operating in the health care industry. Mr. Denner gained experience as portfolio manager during his stint at Andreas Halvorsen’s Viking Global, which ended in 2006. For the next six years, Mr. Denner served as Senior Managing Director at Carl Icahn’s Icahn Capital LP, after which he decided to found his own investment firm. As of its last 13F filing, Sarissa Capital owns an equity portfolio with a market value of $282.53 million.
Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) was Sarissa Capital’s top pick last quarter, with a position of 12.85 million shares, representing 31.25% of the fund’s equity portfolio. Mr. Denner’s firm increased its stake during the second quarter, acquiring 6.87% of the company’s outstanding stock. Although the stock only gained 3.46% in 2014, this year looks promising, especially after the release of the company’s latest financial results. Among other things, Ariad posted a 695% increase in revenue in the fourth quarter, leading to a net loss of $0.03 per share, compared to a net loss of $0.40 per share for the same period in 2013. The news led to a 10% bump in share price on Friday, as optimism spread amongst investors. In addition, Sarissa holds an activist stake in Ariad Pharmaceuticals and, as it was mentioned earlier, has recently disclosed its plans regarding the future of the company, which involve the retirement of CEO and Chairman Harvey Berger, along with the removal of company’s lead independent director Wayne Wilson from the seat. Since negotiations between Sarissa Capital and the company’s other board members ended in an impasse, the investment firm will attempt to relieve both men from their duties at Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA)’s annual shareholder meeting in June. Furthermore, the hedge fund has stated its intention to seek the election of Richard C. Mulligan, Ph.D. and Anna Protopapas to the Board of Directors.
With a stake of 775,000 shares, Quest Diagnostics Inc (NYSE:DGX) was the second-largest equity in Sarissa Capital’s portfolio, accounting for 18.4% of all holdings. The hedge fund acquired a new position in the company in the fourth quarter of 2013, and only altered the position once, by increasing it by 75,000 shares the following quarter. Last year, the stock gained almost 24%, while share prices have grown by approximately 6% year-to-date. Furthermore, Quest Diagnostics Inc (NYSE:DGX) has numerous institutional investors among its shareholders, such as Ken Griffin’s Citadel Investment Group. Last quarter, the hedge fund increased its stake in the company to 2.46 million shares, representing a huge increase in its exposure to the stock.
Sarissa Capital was also bullish on Amgen, Inc. (NASDAQ:AMGN) last quarter, increasing its holding by 165% last quarter, and disclosing a position of 318,000 shares. The investment firm acquired an initial stake of 45,000 shares in the company in last year’s Q2, consistently increasing its exposure over the past months.
The stock performed very well last year, gaining around 38% after reaching a 10-year high of $173.14 per share in December. Hence, it comes as no surprise that several hedge funds have their eyes set on Amgen, Inc. (NASDAQ:AMGN). Dan Loeb’s Third Point is certainly bullish regarding the company, as it holds a stake of 10.67 million shares as of last quarter. This position accounts for 15.33% of the firm’s equity portfolio, following the 700% increase in the holding last quarter. Finally, Sarissa Capital’s top 3 pick last quarter is set to continue growing, thanks to the success of its products and a pipeline full of promising projects.
Disclosure: none.
