Below we present the list of Top 5 Healthcare Stocks for the Future. For the first half of the list and an introduction to Dr. Christiana Goh Bardon’s Burrage Capital Management, please see Top 10 Healthcare Stocks for the Future. Note that all hedge fund data is based on the exclusive group of 800+ funds tracked by Insider Monkey.
- OrthoPediatrics Corp. (NASDAQ:KIDS)
OrthoPediatrics Corp. (NASDAQ:KIDS) kicks off the second-half of our list, as Burrage Capital owned 171,607 shares of KIDS on September 30. Hedge funds don’t seem to be big fans of KIDS (that’s ageism!), as just 12 of them were shareholders of the stock on September 30 and owned just 7.8% of its shares.
The medical device company has consistently grown revenue by 20+% since its inception, including by 26% last year, and has a range of new products on the market (and more in development) that will expand its addressable market and which should allow it to continue growing revenue at a strong clip post-Covid.
- PTC Therapeutics, Inc. (NASDAQ:PTCT)
PTC Therapeutics, Inc. (NASDAQ:PTCT) is next up, as Burrage Capital owned 173,545 PTCT shares on September 30, one of 25 hedge funds that owned the stock on that date. That was down from 36 a year earlier. Hedge funds have likely been selling out of PTCT due to a lack of promising near-term catalysts now that spinal muscular atrophy treatment risdiplam has been partially monetized, as much of PTC’s pipeline that will drive its future growth is still in the early stages. The company has nonetheless been making some waves this year, acquiring Censa Pharmaceuticals in May.
- IVERIC bio, Inc. (NASDAQ:ISEE)
Dr. Bardon’s healthcare-focused hedge fund was one of numerous funds to take a stake in IVERIC bio, Inc. (NASDAQ:ISEE) over the last year, doing so in the fourth quarter of 2019. 26 hedge funds were Iveric shareholders on September 30, up from just five a year earlier. Burrage Capital owned just under 1.50 million ISEE shares on September 30.
Hedge funds have regained interest in the company, formerly called Opthotech Corporation, after its transition to gene therapies and the successful trial of its C5 inhibitor Zimura, which provided a 28% relative benefit compared to placebo in the treatment of geographic atrophy. The condition affects about 1 million people in the U.S and 5 million worldwide and has no FDA-approved treatment. Iveric Bio made a $50 million stock offering in June which should help carry it through Zimura’s march to commercialization.
- MEI Pharma Inc (NASDAQ:MEIP)
Burrage Capital had a 2.7% ownership stake in MEI Pharma Inc (NASDAQ:MEIP) at the end of Q3, the largest position in any of its holdings. Hedge fund ownership of MEIP peaked at the end of June at 20 before sliding back to 16 a quarter later after the company announced in early July that it was discontinuing its Phase 3 trial of Pracinostat after an analysis by the trial’s Independent Data Monitoring Committee found that the study’s survival endpoint was unlikely to be met.
MEIP shares have fallen by 29% since then while the company switches focus to its treatment for B-cell malignancies, zandelisib, which Brookline Capital believes could be commercialized in 2022. MEI Pharma had $183 million in cash in September, which it expects will carry it through 2023.
- Epizyme Inc (NASDAQ:EPZM)
Topping our list of Top Healthcare Stocks for the Future is Epizyme Inc (NASDAQ:EPZM), which could be an attractive takeover target according to both Jefferies and Citi, the latter of which believes its lymphoma drug Tazverik is being underestimated by the market. Dr. Bardon’s Burrage Capital owned just over 1 million shares of EPZM on September 30, valued at $11.96 million.
Citi believes an Epizyme sale could land in the $45-$55 per share price range, but isn’t likely to occur until the drug has delivered a couple quarters of positive sales results. Not everyone is convinced by Tazverik’s opportunity though despite some analysts anticipating it will achieve blockbuster status by 2024. The drug’s net revenue missed estimates in Q3 despite rising by 55% quarter-over-quarter and EPZM shares have tumbled by over 50% this year.
If you’d like to consider some less risky stock picks that hedge funds love, check out the 10 Best Bank Stocks To Buy Right Now.
Disclosure: None.
