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

#2 Shire PLC (ADR) (NASDAQ:SHPG)

– Shares Owned by Paulson & Co. (As of December 31): 6.84 Million

– Value of Paulson’s Holding (as of December 31): $1.40 Billion

– Q1 Return: -15.8%

Mr. Paulson and his team were mildly bullish on Shire PLC (ADR) (NASDAQ:SHPG) in the final quarter of 2015, after increasing the stake in Shire by a mere 39,600 ADRs during the quarter. The 6.84 million-ADR stake at the end of 2015 was worth $1.40 billion, accounting for 8.39% of the fund’s equity portfolio. Earlier this year, the Boards of Directors of Dublin-based Shire and Baxalta Inc. (NYSE:BXLT) reached an agreement under which the two entities will merge to create a global leader in rare disease drugs. The terms of the agreement say that Baxalta shareholders are set to receive $18.00 in cash and 0.1482 Shire ADS per each Baxalta share. Baxalta is a global biopharmaceutical company that develops, manufactures and commercializes therapies for orphan diseases and underserved conditions in hematology, oncology and immunology. The aforementioned transaction is anticipated to close in mid-2016. Shire current trades around 11.8-times expected earnings, which implies a 24% discount to the pharmaceutical sector (the forward P/E multiple for this sector equals 15.6). At the end of March, the United States District Court for Southern Florida ruled in favor of Shire PLC, preventing Allergan from marketing generic versions of Shire’s LIANDA, a drug for ulcerative colitis, in the United States until 2020. A total of 40 hedgies tracked by Insider Monkey had long positions in Shire at the end of 2015. William B. Gray’s Orbis Investment Management owns 494,865 ADRs of Shire PLC (ADR) (NASDAQ:SHPG) as of the end of the final quarter of 2015.

#1 Allergan plc (NYSE:AGN)

– Shares Owned by Paulson & Co. (As of December 31): 5.53 Million

– Value of Paulson’s Holding (as of December 31): $1.73 Billion

– Q1 Return: -14.2%

Paulson & Co. trimmed its stake in Allergan plc (NYSE:AGN) by 1.65 million shares during the December quarter, ending the year with 5.53 million shares valued at $1.73 billion. Allergan plc and Pfizer Inc. (NYSE:PFE) inked a merger agreement in November 2015, under which the two companies were set to create the world’s largest drug maker. That multi-billion-dollar deal was also set to be one of the largest tax inversions in the entire history, but the Obama administration took serious steps that appear to have brought an end this mega-deal. According to a fresh article by Financial Times, the Board of Directors of Pfizer decided to abandon the deal, after the U.S. Treasury Department announced proposed regulations that are believed to specifically target the Pfizer-Allergan merger. The maker of Botox and other drugs has seen its shares plummet nearly 15% on Tuesday, which represents a sign that investors do not believe that the deal will go through. Assuming that the New York-based pharmaceutical company walks away from the previously-planned transaction, the company has to pay Dublin-based Allergan a break-up fee of up to $400 million. Allergan was the most popular stock among the hedge funds tracked by Insider Monkey at the end of the fourth quarter, with 159 money managers being invested in the company. Dan Loeb’s Third Point LLC reported owning 5.40 million shares of Allergan plc (NYSE:AGN) through its 13F for the December quarter.

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