Billionaire John Paulson’s 13F Picks Post 13% Drop in Q1

#4 Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)

– Shares Owned by Paulson & Co. (As of December 31): 20.41 Million

– Value of Paulson’s Holding (as of December 31): $1.34 Billion

– Q1 Return: -18.0%

The multi-billion-dollar hedge fund upped its position in Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) by 2.41 million American Depositary Receipts (ADRs) during the December quarter to 20.41 million ADRs, which were valued at $1.34 billion. Teva Pharmaceutical is an Israel-based pharmaceutical company that develops, produces and markets generic medicines, as well as a portfolio of specialty medicines. In July 2015, the world’s largest maker of generic drugs announced an agreement to purchase Allergan’s generics drug business Actavis Generics for a consideration of $33.75 billion in cash and roughly 100 million Teva shares. The acquisition, which is anticipated to close in the near future, will strengthen Teva’s negotiating power with governments and private health insurers. Teva Pharmaceutical generated total revenue of $19.65 billion in 2015, which decreased from $20.27 billion in 2014 and $20.31 billion in 2013. Meanwhile, the expiration of the original patent for the company’s leading multiple sclerosis therapy Copaxone has triggered a wave of patent challenges and legal actions from other drug manufacturers. Copaxone accounted for approximately 20% of Teva’s revenues in 2015, and contributed significantly to the company’s bottom-line figure and cash flow from operations. The number of hedge funds with stakes in the Israeli company increased to 81 from 70 during the final quarter of 2015. Those 81 funds amassed 17.40% of the company’s outstanding number of ADRs. Andreas Halvorsen’s Viking Global owns a larger stake in Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) than Paulson & Co.’s, comprising 25.04 million shares as of December 31.

#3 Valeant Pharmaceuticals Intl Inc. (NYSE:VRX)

– Shares Owned by Paulson & Co. (As of December 31): 13.27 Million

– Value of Paulson’s Holding (as of December 31): $1.35 Billion

– Q1 Return: -74.1%

John Paulson’s fund increased its position in embattled Valeant Pharmaceuticals Intl Inc. (NYSE:VRX) by 4.38 million shares during the fourth quarter of 2015, ending 2015 with 13.27 million shares valued at $1.35 billion. The Canadian-based pharmaceutical company has seen its market value plummet by 84% in the past 12 months, after various politicians criticized the company for exploitative price gouging and short-sellers condemned the company’s relationship with mail-order pharmacy Philidor RX Services LLC, which was accused of accounting fraud. Nonetheless, shares of Valeant jumped 10% on Tuesday, after the company announced the completion of its internal review of various Philidor and related accounting matters, saying that no additional issues requiring restatement had been found. More importantly, the company also said that it is on track to file its Form 10-K with the SEC before the end of April, which implies that Valeant is not likely to default on its debt for breaching financial reporting covenants. Therefore, it appears that the appointment of activist investor Bill Ackman to the company’s Board of Director has started to bear fruit. The highly-scrutinized pharmaceutical company also announced plans to replace Chief Executive Officer Michael Pearson, a move intended to regain some credibility and restore investors’ confidence in the company. There were 83 money managers from our system with stakes in Valeant at the end of 2015, amassing 36% of the company’s outstanding common stock. According to a recent 13D filing, Mr. Ackamn’s Pershing Square Management Capital L.P. owns 30.71 million shares of Valeant Pharmaceuticals Intl Inc. (NYSE:VRX), which include 21.59 million shares of common stock and 9.12 million shares underlying over-the-counter American-style call options.