These Hot Healthcare Stocks Lead Palo Alto Investors’ Picks To Big Q2 Returns

AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) was also very instrumental in Palo Alto Investors’ great stock pick returns in the second quarter. Going into the second quarter, the fund held a total of 2.18 million shares of the company with a market value of $119.54 million. The Waltham, Massachusetts-based company is a developer of treatments for iron deficiency anemia in adults. AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) has had notable corporate activities that have been responsible for its 26% gain in the second quarter. Its most notable activity was the release of Makena, a hydroxyprogesterone caproate injection, which earned it up to $55.50 million in revenue in the first quarter of 2015. Last November, AMAG acquired Lumara Health’s maternal unit for $675 million and currently has plans to purchase the world’s largest stem cell bank, Cord Blood Registry, for $700 million. The company’s revenue for the first quarter of 2015 was up by 330.3% on a year-over-year basis. Heading into the second quarter, Palo Alto Investors was the biggest shareholder out of the over 700 hedge funds that we track. Other notable investors in the stock were Phill Gross and Robert Atchinson‘s Adage Capital Management with 1.90 million shares, and Stephen Dubois’s Camber Capital Management with 1.02 million.

Another notable contributor to Palo Alto Investors’ returns was Kythera Biopharmaceuticals Inc (NASDAQ:KYTH), which posted gains of about 50.2% earnings growth. The company’s growth in the second quarter is mainly attributed to its agreement to sell itself to Botox maker Allergan PLC for $75 per share. The company’s Kybella, an injected cosmetic treatment, was recently approved and is expected to generate an approximate $500 million in domestic revenue. Going into the second quarter, Palo Alto Investors held a total of 1.38 million shares of Kythera Biopharmaceuticals Inc (NASDAQ:KYTH) valued at $69.34 million. The company’s top ten shareholders at the end of the first quarter, out of the hedge funds that we track, either created new positions in the stock or increased their stakes during the quarterly period ended March 31. Arthur B Cohen and Joseph Healey‘s Healthcor Management LP increased its stake in the company by 364% to own 425,000 shares. Roberto Mignone’s Bridger Management opened a new position of 444,999 shares during the first quarter.

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