Goldman Sachs’ Top Fund Manager Stock Picks: 25 Best Overweight Stocks

3. The Cigna Group (NYSE:CI)

Number of Hedge Fund Investors In Q2 2024: 66

Mutual Fund Overweight Percentage: 0.16%

The Cigna Group (NYSE:CI) is an American pharmaceutical and health care benefits management company. It is one of the biggest pharmacies in the US courtesy of having more than 62,000 locations in its chain. This allows The Cigna Group (NYSE:CI) to enjoy strong supplier partnerships and economies of scale that lead to low costs. As of H1 2024, $87 billion out of the firm’s $118 billion in revenue came from its pharmacy division. The Cigna Group (NYSE:CI) also benefits from having a diversified business model as its pharmacies offer both generic and specialty medicines. As a result, the firm can rely on stable cash flows during an economic downturn and simultaneously enjoy revenue from costlier specialty medicines. Additionally, a sizeable presence in the specialty business also means that The Cigna Group (NYSE:CI) can benefit from the growing popularity of bio similar drugs and new treatments for rare diseases along with genetic treatments.

The Cigna Group (NYSE:CI)’s management shared details for its Specialty business during the Q2 2024 earnings call:

“In Accredo, our specialty business, our growth continues to be fueled by secular tailwinds as well as Accredo’s differentiated strength which makes us the market leader in the space. Biosimilars, for example, represent a force of change and a substantial opportunity for continued growth and impact. At the end of June, we began dispensing our interchangeable biosimilar for Humira. Our program has zero dollar out-of-pocket cost for patients, saving them on average $3,500 per year. To deliver these savings, we have agreements in place with multiple manufacturers that will produce biosimilars for Evernorth pharmaceutical distributor, Quallent Pharmaceuticals. Now the biosimilar opportunity goes well beyond Humira. By 2030, we expect an additional $100 million of annual specialty drug spend in the U.S. will be subject to biosimilar and generic competition.

And Accredo is well positioned to deliver differentiated value for our clients, customers and patients.”