Stumbling Biotech Stocks Spell Doom for Baker Bros. Advisors

#3 Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN)

– Shares Owned by Baker Bros. Advisors (as of December 31): 6.54 million

– Value of Holding (as of December 31): $1.25 billion

Baker Bros. Advisors also left its stake in Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) unchanged during the fourth quarter. Notable investors that reduced their stakes in Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) during the same period included billionaire David E. Shaw‘s firm, D.E. Shaw, which brought its holding down by 27% to 358,241 shares. Shares of Alexion Pharmaceuticals are currently trading down 26% year-to-date. On March 28, the Japanese Ministry of Health, Labor and Welfare approved the company’s drug ‘Kanuma’ for the treatment of patients with lysosomal acid lipase deficiency (LAL-D). Alexion Pharmaceuticals posted EPS of $1.11 on revenue of $701.00 for the first quarter, missing the consensus estimates of EPS of $1.13 on revenue of $710.98 million.

#2 Seattle Genetics, Inc. (NASDAQ:SGEN)

– Shares Owned by Baker Bros. Advisors (as of December 31): 37.3 million

– Value of Holding (as of December 31): $1.67 billion

Amid a 16.4% rise in Seattle Genetics, Inc. (NASDAQ:SGEN)’s stock during the fourth quarter, Baker Bros. Advisors increased its stake in the company by 4%. Funds that initiated a stake in Seattle Genetics, Inc. (NASDAQ:SGEN), during the same period, included Ken Greenberg and David Kim‘s Ghost Tree Capital, which purchased 225,000 shares of the company. Baker Bros. Advisors submitted a 13D filing in March, which revealed that the fund owned 43.35 million shares or 29.5% of Seattle Genetics’ outstanding stock. Seattle Genetics had declined 40% of its market capitalization this year by mid-February, and even though it has managed to recover some of those losses, it is still 25% in the red year-to-date. Despite the turmoil in the biotech space, some analysts have a positive outlook on Seattle Genetics due to the company’s promising drug pipeline and its strategic partnership with Japan-based Takeda Pharmaceuticals. On March 2, analysts at SunTrust initiated a coverage on the stock with a ‘Neutral’ rating and $34 price target.

#1 Incyte Corporation (NASDAQ:INCY)

– Shares Owned by Baker Bros. Advisors (as of December 31): 19.48 million

– Value of Holding (as of December 31): $2.11 billion

After increasing its stake in Incyte Corporation (NASDAQ:INCY) by 1% and 32% during the second and third quarter respectively, Baker Bros. Advisors again increased its stake in the company by 1% during the fourth quarter. Apart from owning 10.4% of the company’s shares, the fund also owned almost $600 million in Incyte’s bonds at the end of December. However, Baker Bros. Advisors top stock pick going into 2016 has turned out to be the worst performer among its five largest holdings so far this year. Shares of Incyte Corporation (NASDAQ:INCY) are trading down 33% year-to-date. Investors tracked by us that sold their entire stake in the company during the fourth quarter included billionaire Jim Simons‘ Renaissance Technologies. For its fiscal 2016 first quarter, analysts are expecting EPS of $0.29 on revenue of $266.38 million, compared to a per share loss of $0.11 on revenue of $159.28 million it reported for the same quarter last year.

Disclosure: None