Palo Alto Investors’s Bets on ABIOMED, Inc. (ABMD), United Therapeutics Corporation (UTHR) and Other Stocks Lift Its Q3 Returns

Palo Alto Investors was founded by William Leland Edwards in 1989. The fund usually invests in companies with market capitalization less than $3 billion. Palo Alto Investors’ areas of focus include healthcare, energy, and technology. The firm reported an equity portfolio worth $1.32 billion as of the end of June. In the third quarter, Palo Alto Investors delivered a weighted average return of 19.35% from 18 companies worth over $1 billion. However, it’s worth mentioning that our returns may be different from the fund’s actual returns, as they do not factor in changes to positions during the quarter, or positions that don’t get reported on Form 13Fs, like short positions.

Having said that, let’s take a look at Palo Alto’s positions in four of these 18 companies which added to the fund’s impressive gains of the third quarter.

Palo Alto Investors dumped 11% of its stake in ABIOMED, Inc. (NASDAQ:ABMD) during the second quarter, ending the period with a total of 2.17 million shares of the company worth of $225.99 million. The Massachusetts-based medical implant device maker’s stock returned 17.7% during the third quarter. ABIOMED, Inc. (NASDAQ:ABMD) was in the equity portfolios of 29 funds tracked by us at the end of June, compared to 24 funds a quarter earlier. Aside from Palo Alto Investors, Renaissance Technologies owned a $67.9 million position in the company. Other investors bullish on the company included Sectoral Asset Management, Arrowstreet Capital, and Polar Capital.

Palo Alto Investors upped its stake in Maryland-based biotechnology company United Therapeutics Corporation (NASDAQ:UTHR) by 12% to 1.72 million shares valued at $182.04 million during the second quarter. The stock advanced by 11.5% during the third quarter. At the end of the second quarter, a total of 30 funds from our database were bullish on this stock, down by 6% from one quarter earlier. Among these funds, Scopia Capital held the most valuable stake in United Therapeutics Corporation (NASDAQ:UTHR), which was worth $455.6 millions at the end of the second quarter. AQR Capital Management, Consonance Capital Management, and Renaissance Technologies were also bullish on United Therapeutics Corporation (NASDAQ:UTHR).

In BioMarin Pharmaceutical Inc. (NASDAQ:BMRN), Palo Alto Investorsboosted its stake by 29% over the quarter to 1.74 million shares valued at $135.17 million at the end of June. In the following three months, the fund saw the stock gain 18.9%. The number of funds from our database that were bullish on BioMarin Pharmaceutical inched down by two to 42 during the second quarter. More specifically, Baker Bros. Advisors was the largest shareholder of BioMarin Pharmaceutical Inc. (NASDAQ:BMRN), with a stake worth $373.9 millions reported as of the end of June. Citadel Investment Group, OrbiMed Advisors, and Alyeska Investment Group also held valuable positions in the company.

Palo Alto Investors increased its stake in Clovis Oncology Inc (NASDAQ:CLVS) by 9% during the second quarter, ending the period with 3.80 million shares worth $52.19 million. The stock surged by 162.8% during the third quarter, lifting the returns of 21 funds from our database that held shares at the end of June. Trailing Palo Alto Investors, which held the largest stake, was Redmile Group, which amassed a stake valued at $42.5 million. Consonance Capital Management, Healthcor Management LP, and Point State Capital also held valuable positions in the company.

 

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