Sarissa Capital Management is a Greenwich, Connecticut-based activist hedge fund established in 2012 by its current chief investment officer, Dr. Alexander John Denner, also known as Alex PhD. Before launching his own investment fund, Mr. Denner sharpened his investment skills as a portfolio manager at Viking Global, and as a Senior Managing Director at Icahn Capital LP, where he formed an activist strategy in healthcare and pushed for some of the fund’s best investment moves, such as positions in Genzyme, Biogen Inc (NASDAQ:BIIB), and ImClone to name a few. Mr. Denner has also served as a director on the board of many healthcare companies, including ARIAD Pharmaceuticals Inc and Enzon Pharmaceuticals, and is currently part of the leadership teams of Biogen and The Medicines Company (NASDAQ:MDCO). Alex holds an S.B. degree from the Massachusetts Institute of Technology and M.S., M.Phil and PhD degrees from Yale University.
Naturally, given Mr. Denner’s considerable healthcare-related investing experience, Sarissa Capital Management mainly invests in pharmaceutical and biotechnology enterprises. As an activist investor, he works passionately on reconstructing companies’ methodologies in order to maximize shareholder value. He was involved in some of the most significant and prosperous strategic deals in the healthcare industry in recent years, such as the sale of ARIAD to Takeda, the sale of Idenix to Merck & Co., Inc. (NYSE:MRK), and the spin-off of Biogen (BIIB)’s Bioverativ, to name a few. His investment strategies have delivered positive returns through the years, as Sarissa Capital Management’s leading fund gained 7.9% from May to December 2013, 9.6% in 2014 and 2.5% through February 2015. According to the fund’s plain brochure it held around $569.40 million of Advisory Client regulatory assets on a discretionary basis at the end of 2016.
At the Delivering Alpha Conference in July, Alex Denner talked about his best idea for investing and his number one pick was Biogen. He explained further that Biogen is the leading neuroscience company and that the largest part of the company’s business is treatments for multiple sclerosis (MS), though he doesn’t expect Biogen to have any new drugs in the MS sector in coming years.
Denner also pointed out that many investors don’t like stocks that don’t have big upside in their core businesses, making the stock cheaper. Nevertheless, investors of Biogen can rely on its royalty businesses, which are bringing in billions of dollars. Not only that, Denner emphasized that Biogen has a very impressive pipeline, with one of the drugs that has brought the most attention being called Aducanumab, for treating Alzheimer’s disease. Although the drug is still not approved, it is in the late stages of testing and has thus far delivered better results than any other Alzheimer’s drug. According to Denner: “It may be the largest drug in the world, or it might not work”.
Alex also has faith in another drug recently launched by Biogen, called Spinraza, which offers relief to patients with spinal muscular atrophy. “This drug is really having a remarkable effect; it’s a wonderful thing for patients,” he said.
Highlighting the reasons that compelled Mr. Denner to pick Biogen as his best idea:
– The company’s core business is already producing a huge amount of cash flow, and it should continue to do so for many years.
– Fantastic new drug, Spinraza, which recently debuted on the market.
– A very promising pipeline with huge potential.
Aside from his top pick, Alex Denner also mentioned two other companies with interesting prospects: Ironwood Pharmaceuticals (IRWD) and The Medicines Company (MDCO).
Disclosure: None. This article was originally published on Insider Monkey.
