LRT Capital Management, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. A return of -7.37% was recorded by the LRT Economic Moat strategy for the first quarter of 2022, resulting in a 12-month return of +16.72%. In the LRT Economic Moat strategy, as of April 1st, 2022, the fund’s net exposure was approximately 99% and its estimated net beta-adjusted exposure was 62.2%. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, LRT Capital Management mentioned Repligen Corporation (NASDAQ:RGEN) and explained its insights for the company. Founded in 1981, Repligen Corporation (NASDAQ:RGEN) is a Waltham, Massachusetts-based bioprocessing-focused life sciences company with an $8.7 billion market capitalization. Repligen Corporation (NASDAQ:RGEN) delivered a -40.63% return since the beginning of the year, while its 12-month returns are down by -24.44%. The stock closed at $157.24 per share on April 29, 2022.
Here is what LRT Capital Management has to say about Repligen Corporation (NASDAQ:RGEN) in its Q1 2022 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), chromatography (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) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Repligen Corporation (NASDAQ: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 -20.72% return in the past 3 months.
In March 2022, we also shared another hedge fund’s views on Repligen Corporation (NASDAQ:RGEN) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
