Billionaire David Tepper Makes Huge Investments In These 4 Drug Stocks

Appaloosa Management bought 5.05 million shares of Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) during the fourth quarter, which represented a new position for the fund, valued at over $183.17 million at the end of 2016. Teva has not had the same success as Allergan this year, falling by another 8.5% after 45% losses in 2016. Tepper admitted during the CNBC interview last week that the purchase was not one of the fund’s best, but does think the stock is cheap right now.

Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) did get some good news in February when Pfizer received an FDA warning letter related to the production of 40mg doses of Momenta’s Glatopa, a generic version of Teva’s Copaxone. The issue was not expected to be resolved during the current quarter. However, the letter did not affect the production or sale of 20mg doses of the drug. Teva claimed that it could lose as much as $1.3 billion in revenue in 2017 to generic versions of Copaxone in the 40mg dose, which it lost key patents to earlier this year. Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) has been able to withstand the earlier loss of the 20mg patents by switching the majority of its patients over to the 40mg dose of the Multiple Sclerosis treatment.

Pfizer Inc. (NYSE:PFE) was resilient in 2016, gaining 1.7% in the face of the industry’s severe declines thanks to its promising pipeline (it expects to have about 10 new drugs approved by the end of 2018) and impressive dividend (its forward yield currently stands at 3.75%). Its shares are also off to a solid start to 2017, gaining just over 5%. That’s good news for Tepper, whose fund took a 4.81 million-share stake in the stock in the fourth quarter. Towards the end of last month, Pfizer Inc. (NYSE:PFE) hit up Taiwan’s bond market, issuing $1.1 billion in debt, with the proceeds to be used to repay its outstanding debt and for general corporate purpose. Pfizer Inc. (NYSE:PFE) can redeem the 30-year bonds at any time should changes to U.S tax laws be enacted.

Lastly is Mylan N.V. (NASDAQ:MYL), in which Tepper’s fund bought 3.28 million shares during the fourth quarter, taking a new position in the stock. 2016 was a rough one for Mylan, as it became the poster child for the drug industry’s egregious price increases due to the price of the company’s EpiPens having been jacked by 500% in the span of six years. Mylan N.V. (NASDAQ:MYL) was also hit with a $465 million fine in October for improperly classifying its EpiPens as a generic drug, which lead to severe Medicaid overcharges. With that muck out of the way, Mylan has rebounded in 2017, with gains of 13%, after losing 27% in 2016. Mylan N.V. (NASDAQ:MYL) CEO Heather Bresch, whose salary soared nearly in tandem with the price of EpiPens, recently told CNBC that drug pricing was “broken”.

Disclosure: None