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Akorn, Inc. (AKRX), United Therapeutics Corporation (UTHR) Among Consonance Capital’s Winning Bets in Healthcare

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The $5.50 billion pharmaceutical company Akorn, Inc. (NASDAQ:AKRX) was one of the top gainers on Wednesday, closing the session with an almost 10% gain. The appreciation came on the back of the company filing its 10-K report with the Securities and Exchange Commission. However, Akorn filed the report with a small delay after it discovered an error that overstated chargeback reserve in connection with applying the acquisition method of accounting at the closing of the purchase of Hi-Tech Pharmacal. Nevertheless, the stock jumped on the back of strong revenue growth and was supported by the previously disclosed optimistic outlook for the current year. Investors also seem to be bullish on Akorn, as the number of funds holding the stock (among over 700 funds that we track) went up to 27 from 23 a quarter earlier. Moreover, investors have been piling more capital into the company and at the end of 2014, they held $275.94 million worth of shares, versus $146.16 million a quarter earlier. Among the funds that we track, the largest shareholder of Akorn, Inc. (NASDAQ:AKRX) is Mitchell Blutt‘s Consonance Capital Management, which holds 1.68 million shares as of the end of 2014. up by 44% on the quarter. The position valued at $60.94 million amasses 7.85% of the fund’s equity portfolio.

Akorn, Inc. (NASDAQ:AKRX)

Akorn, Inc. (NASDAQ:AKRX) posted revenue of around $593 million for the last year, a significant growht from $318 million in the previous year. However, the company’s diluted EPS declined to $0.33 from $0.46 posted for 2013. Nevertheless, for the current year, the company expects its revenue to grow further to up to $980 million, while EPS is expected in the range between $1.88 and $1.98. Akorn manufactures and sells a full line of diagnostic and therapeutic ophtalmic pharmaceuticals, as well as hospital drugs and injectable pharmaceuticals. Recently the company launched four new products, including Adenosine Injection and Dexmedetomidine Hydrochloride Injection.

Consonance Capital Management initiated a stake in Akorn, Inc. (NASDAQ:AKRX) during the first quarter of 2014 and initially held 295,000 shares of the company. The stock more than doubled in value since the end of March, 2014. As it has been mentioned earlier, the company has gained the attention of investors as of late and some billionaire fund managers such as Ken Griffin of Citadel Investment Group and Israel Englander of Millennium Management boosted their stakes in the company during the fourth quarter. Citadel disclosed ownership of 570,700 shares, up by 500% on the quarter, and Millennium more than doubled its stake to 121,900 shares.

Aside from Akorn, Inc. (NASDAQ:AKRX), we should also take a look at some other investments of Consonance Capital Management. Mr. Blutt manages an equity portfolio valued at around $776.33 million, which is primarily invested in healthcare stocks, which amass in aggregate around 90% of the total value. The fund also invests in many small-cap stocks, which is one more reason why we should follow closer its activity. Our research has showed that immitating the hedge fund’s activity among small-cap stocks can help beat the market by around 1.0 percentage point per month. Based on this research, we have been sharing 15 most popular small-cap picks among hedge funds in our newsletters since August 2012. Since then, our strategy returned 132%, beating the market by around 79 percentage points.

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