In this article, we will look at 10 pharmaceutical stocks to buy now according to billionaire Kerr Neilson.
Kerr Neilson is an Australian billionaire investor and hedge fund manager of Platinum Asset Management. Mr. Neilson was born in 1950 and bought his first stock at the age of 13, signaling his knack for finance. He earned a bachelor’s degree in Commerce from the University of Cape Town in 1973, after which he started his career in investment management.
Platinum Asset Management
Mr. Neilson founded Platinum Asset Management in 1994 with an initial investment from legendary hedge fund manager George Soros. The firm targeted international equities and followed a long-term value investing strategy. Kerr Neilson has been dubbed the “Australian Warren Buffett” because of his investment philosophy of initiating long positions in high-value stocks. As of December 31, 2022, Kerr Neilson manages more than $3.59 billion in 13F securities through his hedge fund, Platinum Asset Management.
Platinum Asset Management’s Performance
Platinum Asset Management doesn’t experience frequent losses. The fund lost 13.5% in 2011 and its maximum drawdown was 30.5% in 2008. The fund’s annualized returns since inception as of March 31 2022 stand at 11.4%, vs 7.6% for the benchmark world index.
Platinum Asset Management has a top 10 holdings concentration of 57.98%. Some of the most notable holdings of the fund include Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:FB), and Alphabet Inc. (NASDAQ:GOOG). However, for this article, we will be looking at the top 10 pharmaceutical stocks to buy according to Kerr Neilson’s hedge fund.
Kerr Neilson of Platinum Asset Management
Our Methodology
To determine 10 pharmaceutical stocks to buy now according to billionaire Kerr Neilson, we went through Platinum Asset Management’s fourth-quarter 2021 investment portfolio.
10 Pharmaceutical Stocks to Buy Now According to Billionaire Kerr Neilson
10. Epizyme, Inc. (NASDAQ:EPZM)
Stake Value of Platinum Asset Management: $7,057,000
Percentage of Platinum Asset Management’s 13F Portfolio: 0.19%
Number of Hedge Fund Holders: 22
Epizyme, Inc. (NASDAQ:EPZM) is a commercial-stage biopharmaceutical company that discovers, develops, and commercializes novel epigenetic medicines for patients with cancer and other diseases in the United States. This March, the company reported fourth-quarter 2021 revenues of $11.58 million, up 38.29% year over year from $8.38 million.
On March 2, 2022, H.C. Wainwright analyst Andrew Fein lowered his price target on Epizyme, Inc. (NASDAQ:EPZM) to $10 from $15 but maintained a Buy rating on the shares. The analyst commented that the company’s recent pipeline modifications will drive upside for the stock.
Epizyme, Inc. (NASDAQ:EPZM) is one of the top pharmaceutical stocks to buy according to billionaire Kerr Neilson. As of December 31, 2021, his hedge fund’s stakes in the company were valued at $7.05 million which covers 0.19% of Platinum Asset Management’s investment portfolio.
At the end of the fourth quarter of 2021, 22 hedge funds were long Epizyme, Inc. (NASDAQ:EPZM), up from 10 positions in the prior quarter. The total stakes of these funds amounted to $45.57 million.
Like Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:FB), and Alphabet Inc. (NASDAQ:GOOG), legendary value investor Kerr Neilson is bullish on Epizyme, Inc. (NASDAQ:EPZM).
9. Syneos Health, Inc. (NASDAQ:SYNH)
Stake Value of Platinum Asset Management: $7,331,000
Percentage of Platinum Asset Management’s 13F Portfolio: 0.20%
Number of Hedge Fund Holders: 29
Syneos Health, Inc. (NASDAQ:SYNH) operates as a biopharmaceutical outsourcing solutions company in North America, Europe, the Middle East, Africa, the Asia-Pacific, and Latin America. It operates through two segments: Clinical Solutions and Commercial Solutions.
On February 17, 2022, Syneos Health, Inc. (NASDAQ:SYNH) reported quarterly earnings for the fiscal fourth quarter of 2021 in which the company beat EPS estimates. The company reported earnings per share of $1.48, beating estimates by $0.05. The company’s revenue for the quarter amounted to $1.37 billion, up 20.47% year over year from $1.14 billion. As of April 13, 2022, the stock has gained 2.14% over the past twelve months.
This April, Deutsche Bank analyst Justin Bowers initiated coverage of Syneos Health, Inc. (NASDAQ:SYNH) with a Buy rating and a $102 price target. The analyst and investor sentiment for the stock is positive.
At the close of the fourth quarter of 2021, Syneos Health, Inc. (NASDAQ:SYNH) was a part of 29 hedge fund portfolios. The total stakes of these funds in the company came to $589.92 million, up from $474.70 million in the preceding quarter with 33 positions.
8. Albireo Pharma, Inc. (NASDAQ:ALBO)
Stake Value of Platinum Asset Management: $7,352,000
Percentage of Platinum Asset Management’s 13F Portfolio: 0.20%
Number of Hedge Fund Holders: 15
Albireo Pharma, Inc. (NASDAQ:ALBO) operates as a commercial-stage biopharmaceutical company, focusing on the development and commercialization of novel bile acid modulators to treat orphan pediatric liver diseases and other liver or gastrointestinal diseases and disorders. On February 22, the company announced that the National Institute for Health and Care Excellence has issued guidance that recommends Bylvay for the treatment of all types of progressive familial intrahepatic cholestasis in people aged six months and older. Bylvay is a potent, non-systemic ileal bile acid transport inhibitor, administered as a once-daily treatment.
This March, Wedbush analyst Andreas Argyrides assumed coverage of Albireo Pharma, Inc. (NASDAQ:ALBO) with an Outperform rating and a $75 price target. Moreover, the analyst added the stock to Wedbush’s Best Ideas List.
Platinum Asset Management’s stakes in the company amounted to $7.35 million at the close of Q4 2021, up 29% from the fund’s Q3 2021 stakes. The investment covers 0.20% of Kerr Neilson’s hedge fund portfolio.
By the end of the fourth quarter of 2021, 15 hedge funds were bullish on Albireo Pharma, Inc. (NASDAQ:ALBO). The total stakes of these hedge funds amounted to $99.99 million. This is compared to 13 hedge funds in the preceding quarter with stakes worth $143.4 million.
Platinum Asset Management has a significant stake in Albireo Pharma, Inc. (NASDAQ:ALBO). Other notable stocks held by the hedge fund include Microsoft Corporation (NASDAQ:MSFT), Meta Platforms, Inc. (NASDAQ:FB), and Alphabet Inc. (NASDAQ:GOOG).
7. Zai Lab Limited (NASDAQ:ZLAB)
Stake Value of Platinum Asset Management: $8,836,000
Percentage of Platinum Asset Management’s 13F Portfolio: 0.24%
Number of Hedge Fund Holders: 32
Zai Lab Limited (NASDAQ:ZLAB) develops and commercializes therapies to treat oncology, autoimmune disorders, infectious diseases, and neuroscience. This March, the company reported revenues for the fourth quarter of 2021 which came to $44.17 million, and annual revenues of more than $144 million for the fiscal year 2021.
Last December, Citi analyst Yigal Nochomovitz raised his price target on Zai Lab Limited (NASDAQ:ZLAB) to $231 from $217 and maintained a Buy rating on the shares. The analyst was reportedly bullish on the stock following the company’s news on Zejula, a treatment for damaged DNA in both healthy cells and cancer cells.
Zai Lab Limited (NASDAQ:ZLAB) is one of the best pharmaceutical stocks to buy according to billionaire Kerr Neilson. According to Insider Monkey’s data, Platinum Asset Management upped its previous stakes by 269% in the company at the close of Q4 2021, bringing its stakes to $8.83 million. The investment accounts for 0.24% of Mr. Neilson’s 13F portfolio.
According to Insider Monkey’s database, 32 hedge funds were long Zai Lab Limited (NASDAQ:ZLAB) by the close of Q4 2021. The collective stakes of these funds were valued at $590.48 million.
ClearBridge Investments, an investment management firm, mentioned Zai Lab Limited (NASDAQ:ZLAB) in its third-quarter 2021 investor letter. Here is what the firm had to say:
“Biotechnology company Zai Lab is now our only holding in China. The government wants to grow the domestic health care space as part of its social mission, so although Zai is not a big position, we still believe it is a growth story with immense optionality. The stock was hurt in the quarter by negative sentiment spreading into more areas of the Chinese market.”
6. Esperion Therapeutics (NASDAQ:ESPR)
Stake Value of Platinum Asset Management: $13,566,000
Percentage of Platinum Asset Management’s 13F Portfolio: 0.37%
Number of Hedge Fund Holders: 20
Esperion Therapeutics (NASDAQ:ESPR) is a pharmaceutical company that develops medicines for the treatment of patients with elevated low-density lipoprotein cholesterol. The company’s flagship products are NEXLETOL and NEXLIZET, both of which treat patients with cardiovascular disease.
This February, Esperion Therapeutics (NASDAQ:ESPR) announced earnings for the fiscal fourth quarter of 2021 in which it beat revenue estimates. The company reported quarterly revenues of $15.40 million, up 59.79% year over year, and outperformed market consensus by $0.92 million. As of April 13, 2022, the company’s year-to-date returns are up 11.75%.
On March 10, 2022, H.C. Wainwright analyst Emanuela Branchetti initiated coverage of Esperion Therapeutics (NASDAQ:ESPR) with a Buy rating and a $22 price target. The analyst is bullish on the stock and sees the company as well-positioned to improve its products’ commercial performance.
Esperion Therapeutics (NASDAQ:ESPR) was spotted on 20 hedge fund portfolios at the close of the fourth quarter of 2021. These funds held stakes worth $92.06 million in the company. This is compared to 17 hedge funds in the preceding quarter with stakes worth $48.84 million. The hedge fund sentiment for Esperion Therapeutics (NASDAQ:ESPR) is positive.
5. Prometheus Biosciences, Inc. (NASDAQ:RXDX)
Stake Value of Platinum Asset Management: $20,621,000
Percentage of Platinum Asset Management’s 13F Portfolio: 0.57%
Number of Hedge Fund Holders: 13
Prometheus Biosciences, Inc. (NASDAQ:RXDX) is a biopharmaceutical company involved in the discovery, development, and commercialization of therapeutics and diagnostics products for the treatment of inflammatory bowel diseases.
This February, BTIG analyst Julian Harrison initiated coverage of Prometheus Biosciences, Inc. (NASDAQ:RXDX) with a Buy rating and a $62 price target. The analyst is bullish on the stock, noting that the company’s precision medicine platform in autoimmune diseases has the potential to improve outcomes, reduce trial costs, and ultimately drive the utilization of approved therapeutics.
On March 9, 2022, the company reported fourth-quarter 2021 revenues of $1.04 million and beat revenue estimates by $0.42 million. As of April 13, Prometheus Biosciences, Inc. (NASDAQ:RXDX) has gained 67.29% over the past twelve months and is worth $1.39 billion on the open market.
Insider Monkey was able to identify 13 hedge funds that were bullish on Prometheus Biosciences, Inc. (NASDAQ:RXDX) at the end of the fourth quarter of 2021. The total stakes of these funds in the company equaled $373.24 million. This is compared to 14 positions in the prior quarter with stakes worth $255.2 million. The hedge fund sentiment around Prometheus Biosciences, Inc. (NASDAQ:RXDX) is positive.
4. IDEAYA Biosciences, Inc. (NASDAQ:IDYA)
Stake Value of Platinum Asset Management: $20,829,000
Percentage of Platinum Asset Management’s 13F Portfolio: 0.57%
Number of Hedge Fund Holders: 14
IDEAYA Biosciences, Inc. (NASDAQ:IDYA) is an oncology-focused precision medicine company engaged in the discovery and development of therapeutics for patient populations selected using molecular diagnostics. On March 15, 2022, IDEAYA Biosciences, Inc. (NASDAQ:IDYA) reported quarterly revenues of $2.96 million for the fiscal fourth quarter of 2021.
This March, Stifel analyst Benjamin Burnett upgraded Ideaya Biosciences, Inc. (NASDAQ:IDYA) to Buy from Hold with a price target of $20, down from $27. Burnett commented that he sees one in three people being successfully treated with the company’s leading synthetic lethality program, IDE397. The analyst noted that the stock now has a more favorable risk/reward ratio and can prove to be a valuable investment in the long term.
IDEAYA Biosciences, Inc. (NASDAQ:IDYA) is rising in popularity among elite hedge funds. By the close of Q4 2021, 14 hedge funds were bullish on IDEAYA Biosciences, Inc. (NASDAQ:IDYA) having stakes of more than $187 million in the company. This is compared to 11 hedge funds in Q3 2021, with stakes worth $131.83 million. The hedge fund sentiment for the stock is positive.
3. Recursion Pharmaceuticals Inc (NASDAQ:RXRX)
Stake Value of Platinum Asset Management: $24,733,000
Percentage of Platinum Asset Management’s 13F Portfolio: 0.68%
Number of Hedge Fund Holders: 14
Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) is a clinical-stage biopharmaceutical company that is involved in decoding biology by integrating technological innovations across biology, chemistry, automation, data science, and engineering to industrialize drug discovery.
This April, Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) announced that the U.S. FDA has granted the company Fast Track designation for REC-4881, the company’s treatment for familial adenomatous polyposis.
Platinum Asset Management upped its Q3 2021 stakes in the Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) by 119% in the fourth quarter of 2021. As of December 31, 2021, the fund’s stakes are valued at $24.73 million, which represents 0.68% of its Q4 2021 investment portfolio.
Insider Monkey’s data shows 14 hedge funds that held long positions in Recursion Pharmaceuticals Inc (NASDAQ:RXRX) at the end of the fourth quarter of 2021. The total stakes of these hedge funds amounted to more than $220 million. This is compared to 13 positions in the preceding quarter with stakes worth $299.05 million.
Here is what Baron Discovery Fund had to say about Recursion Pharmaceuticals Inc (NASDAQ:RXRX) in its Q2 2021 investor letter:
“Recursion Pharmaceuticals, Inc. is a biotechnology company engaged in technology-enabled drug discovery. The company uses automated wet-lab infrastructure (actual biologic experimentation) with cell perturbations (multiple experiments done on the duplicate cells), and image capture to generate data at large scale. It also operates its own supercomputer (the “BioHive”) to drive “in-silico” (virtual, software-enabled) inferences based on its data and wet-lab experiments. This combined approach has generated a strong pipeline of programs spanning early discovery to clinical trials, including a collaboration deal with Bayer. The company’s use of artificial intelligence and machine learning lowers the cost of drug discovery and speeds up time to market, and we believe this paradigm is in the early innings of disrupting the entire biopharmaceutical industry. Since Recursion’s program pipeline is still relatively early stage, we have started with a small investment.”
2. Exscientia PLC (NASDAQ:EXAI)
Stake Value of Platinum Asset Management: $32,568,000
Percentage of Platinum Asset Management’s 13F Portfolio: 0.9%
Number of Hedge Fund Holders: 11
Exscientia PLC (NASDAQ:EXAI) is a leading artificial intelligence-driven pharmaceutical company involved in discovering, designing, and developing drugs. The company offers end-to-end AI solutions for target identification, drug candidate design, translational models, and patient selection. On March 23, 2022, Exscientia PLC (NASDAQ:EXAI) reported fourth-quarter 2021 revenues of $5.47 million.
Last October, BofA analyst Michael Ryskin initiated coverage of Exscientia PLC (NASDAQ:EXAI) with a Buy rating and a $27 price target. The analyst noted that using AI to develop drugs in a cost-effective way will significantly drive the growth of the stock.
Exscientia PLC (NASDAQ:EXAI) was spotted on 11 hedge fund portfolios at the end of the fourth quarter of 2021. The total stakes of these funds in the company came to $143.77 million. Of these, $32.56 million belonged to Platinum Asset Management. The investment covers 0.9% of Kerr Neilson’s Q4 2021 investment portfolio.
1. Gilead Sciences, Inc. (NASDAQ:GILD)
Stake Value of Platinum Asset Management: $81,347,000
Percentage of Platinum Asset Management’s 13F Portfolio: 2.26%
Number of Hedge Fund Holders: 54
Gilead Sciences, Inc. (NASDAQ:GILD) is a biopharmaceutical company that develops drugs in the areas of unmet medical need including HIV, hepatitis B, hepatitis C, and influenza in the United States, Europe, and internationally. This February, the company reported earnings per share of $0.69 for the fiscal fourth quarter of 2021 and generated quarterly revenues of $7.24 billion, beating revenue estimates by $0.60 million.
On April 12, Piper Sandler analyst Do Kim raised his price target on Gilead Sciences, Inc. (NASDAQ:GILD) to $72 from $71 and maintained a Neutral rating on the shares.
Gilead Sciences, Inc. (NASDAQ:GILD) is a popular stock pick among value investors. By the end of the fourth quarter of 2021, Gilead Sciences, Inc. (NASDAQ:GILD) was spotted on 54 hedge fund portfolios. The total stakes of these funds came to $2.36 billion, up from $1.75 billion in the prior quarter with 55 positions. The hedge fund sentiment for the stock is positive.
ClearBridge Investments recently published its fourth-quarter 2021 investor letter in which it mentioned Gilead Sciences, Inc. (NASDAQ:GILD). Here is what the firm had to say about the stock:
“Other pharma companies are providing solutions as well. Biopharmaceutical company Gilead Sciences’ remdesivir, sold under the brand name Veklury, is a broad-spectrum antiviral medication administered by intravenous infusion; it can shorten the time to recovery in hospitalized patients and reduce the risk of hospitalization and death in non-hospitalized patients.”
You can also take a look at 10 Best Pharmaceutical Stocks to Buy According to Cathie Wood and 10 Best Pharmaceutical Stocks to Buy According to Billionaire Joseph Edelman.
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Disclosure: None. 10 Pharmaceutical Stocks to Buy Now According to Billionaire Kerr Neilson is originally published on Insider Monkey.
