LRT Capital Management, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. A return of +30.47% was recorded by the LRT Economic Moat strategy year-to-date, putting its 24-month return to +4.34%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
LRT Capital Management, in its Q4 2021 investor letter, mentioned Repligen Corporation (NASDAQ: RGEN) and discussed its stance on the firm. Repligen Corporation is a Waltham, Massachusetts-based bioprocessing company with a $10.4 billion market capitalization. RGEN delivered a -26.37% return since the beginning of the year, while its 12-month returns are up by 3.06%. The stock closed at $188.81 per share on March 03, 2022.
Here is what LRT Capital Management has to say about Repligen Corporation in its Q4 2021 investor letter:
“Based in Waltham, MA, Repligen makes equipment for the biologic drug manufacturing industry. The company’s main products are focus on filtration (48% of revenue), chromatography92 (20% of revenue), process analytics products (9% of revenue), as well as select proteins used in the manufacturing of biological drugs (22%). We believe that biological drugs represent the most exciting frontier of medicine today, with monoclonal antibodies and gene therapy amongst the most promising approaches to tackling rare diseases.
The manufacturing of biological drugs is very different from that of traditional, “small molecule” drugs. Whereas the construction of a traditional line for a traditional small molecule drug might cost as little as $5 million dollars, the development and scaling of a biological manufacturing line can cost well over $100 million. Every biological manufacturing process is different, but their common feature is that the active ingredient in the drug is created by living cells and usually consists of a complex protein that is administered to the patient by injection. In the most general of terms the manufacturing of a biological drugs has the following stages:
● Creation and selection of cell culture to produce desired protein.
● Growth and amplification of selected cells – usually in a bioreactor.
● Filtration, purification, and isolation of active ingredient.
● Testing, quality assurance and packaging.Under CEO Tony Hunt, Repligen has successfully reoriented itself away from selling commoditized inputs to the biological manufacturing process, towards selling specialized proprietary equipment – largely accomplished through M&A. Revenue grew at a CAGR of 22% before Tony joined the company and at 41% since then. Importantly, this growth has not come at the expense of margins or ROIC, which have remained very strong throughout the period.”
Tonhom1009/Shutterstock.com
Our calculations show that Repligen Corporation (NASDAQ: RGEN) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. RGEN was in 37 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 35 funds in the previous quarter. Repligen Corporation (NASDAQ: RGEN) delivered a -29.76% return in the past 3 months.
In December 2021, we also shared another hedge fund’s views on RGEN in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
