AbbVie, Biogen, Gilead: Smart Money Got Burned Betting on Biotech in Q3

#2 Gilead Sciences, Inc. (NASDAQ:GILD)

Number of Hedge Fund Holders (as of June 30): 84
Total Value of Hedge Fund Holdings (as of June 30): $4.93 billion
Hedge Fund Holdings as Percent of Float (as of June 30): 2.90%

Gilead Sciences, Inc. (NASDAQ:GILD) shares fell by 15.8% in the third quarter as investors worried about HCV drug competition. Although Gilead’s Sovaldi and Harvoni have done very well this year, other big drug companies including Abbvie and Johnson & Johnson (NYSE:JNJ) are competing in the market or will in the future. Concerns over future drug price ceilings may also have played a part in the fall. D E Shaw owns 4.39 million shares.

#1 Pfizer Inc. (NYSE:PFE)

Number of Hedge Fund Holders (as of June 30): 85
Total Value of Hedge Fund Holdings (as of June 30): $4.66 billion
Hedge Fund Holdings as Percent of Float (as of June 30): 2.30%

Pfizer Inc. (NYSE:PFE)’s stock fell by 5.6% in the third quarter as investors worried over the company’s patent cliffs. Revenue has been soft in recent years due to various drugs coming off patent, including Celebrex and Zyvox. The company’s blockbuster $5 billion-a-year Lyrica could face generic competition in 2018 too. Not all is lost, however. Pfizer recently closed the acquisition of Hospira, one of the world’s leading makers of biosimilars and injectable drugs and infusion technologies. The global biosimilar market is estimated to be a $20 billion market by 2020 and the global market for generic sterile injectibles is estimated to be as big as $70 billion by the end of the decade. Pfizer has been down the patent cliff path before, with its stock tanking to under $15 a share in 2010 on generic Lipitor concerns. Through M&A and a productive pipeline, Pfizer’s shares have nearly doubled five years later. Investors hope history will repeat again, with Palbociclib, PF-06290510, and PF-06425090 leading the way. Ken Fisher‘s Fisher Asset Management owns 31.82 million shares. 

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