In this article, we will discuss the 10 best biotech stocks to buy according to Joseph Edelman’s Perceptive Advisors.
Joseph Edelman, the billionaire hedge fund manager, founded Perceptive Advisors in 1999. Edelman completed his Master’s in Business Administration from New York University to hone his business and financial talents after graduating from the University of California. As of the second quarter of 2021, Edelman manages more than $15 billion in securities at his hedge fund and has a personal net worth of $2.9 billion. He ranks 389th on the list of the wealthiest Americans in 2021, issued by the news publication Forbes. Edelman was also the 11th highest-earning hedge fund manager in 2018.
Joseph Edelman is considered a ‘rock star’ within the narrow area of biotechnology investing. His devotion to the biotech field has led him to employ a number of doctors, PhDs, and individuals trained in biological sciences. Edelman credited his training in psychology for the hedge fund’s success because, for him, investment in biotech stocks is heavily dependent on analyzing the market participants’ biases. This ideology influenced his hedge fund’s name – Perceptive Advisors.
Edelman’s Perceptive Advisors primarily invests in small and mid-cap biotech stocks using investing analytic expertise. Perceptive Advisors has performed well over the years. In 1999 and 2000, Perceptive Advisors generated returns of 129% and 155%, respectively. The hedge fund posted positive returns throughout the first five years of its existence, from 1999 to 2003, with the exception of the 10% loss in 2002. More recently, Edelman faced a nearly 20% loss in 2021, prior to which his fund generated returns of 52% in 2019 and 29% in 2020.
Some of Edelman’s popular stock picks as of the second quarter of 2021 include United Therapeutics Corporation (NASDAQ: UTHR), Medtronic plc (NYSE: MDT), and Quotient Limited (NASDAQ: QTNT).
Based on the latest 13F holdings for the second quarter of 2021, Perceptive Advisors owns 616,802 shares in United Therapeutics Corporation (NASDAQ: UTHR) worth $110.6 million. United Therapeutics Corporation (NASDAQ: UTHR) is a biotechnology company engaged in the production of novel treatments for various life-threatening diseases.
In Medtronic plc (NYSE: MDT), Joseph Edelman owns 450,000 shares worth $55.8 million, representing 0.72% of the portfolio. Medtronic plc (NYSE: MDT) is a Minneapolis-based medical device company founded in 1949.
Quotient Limited (NASDAQ: QTNT) is another popular stock in Edelman’s portfolio. The Switzerland-based company focuses on transfusion diagnostics. Perceptive Advisors owns close to 16.1 million shares in Quotient Limited (NASDAQ: QTNT) worth $58.9 million.
Our Methodology
For this article, we picked the top 10 biotech stocks from the second quarter portfolio of Joseph Edelman’s Perceptive Advisors.
Why should we pay attention to Perceptive Advisors’ stock picks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
10 Best Biotech Stocks to Buy According to Joseph Edelman’s Perceptive Advisors
10. Landos Biopharma, Inc. (NASDAQ:LABP)
Edelman’s Stake Value: $171,747,000
Percentage of Joseph Edelman’s 13F Portfolio: 2.22%
Number of Hedge Fund Holders: 5
Landos Biopharma, Inc. (NASDAQ: LABP) is ranked tenth on our list of the 10 best biotech stocks to buy according to Joseph Edelman’s Perceptive Advisors. The Virginia-based company is involved in the discovery and production of oral therapeutics for autoimmune diseases. Out of the hedge funds being tracked by Insider Monkey, Perceptive Advisors is the leading investor in Landos Biopharma, Inc. (NASDAQ: LABP) with around 14.87 million shares worth over $171.7 million.
For the second quarter of 2021, Landos Biopharma, Inc. (NASDAQ: LABP) recorded an EPS of $0.12, beating the analysts’ estimate by $0.26. On September 20, the company also announced a research collaboration with the Icahn School of Medicine to further its study on a drug used in the treatment of Crohn’s disease.
On September 23, financial brokerage firm JonesTrading initiated coverage of Landos Biopharma, Inc. (NASDAQ: LABP) with a Buy rating and a price target of $39, noting the updates on trial phases of different drugs produced by the company. Prakhar Agrawal, an analyst at the firm, issued the ratings.
The company saw a decrease in hedge fund sentiment recently. As of the second quarter of 2021, 5 hedge funds out of the 873 funds tracked by Insider Monkey held stakes in Landos Biopharma, Inc. (NASDAQ: LABP), down from 11 in the preceding quarter.
In addition to Landos Biopharma, Inc. (NASDAQ: LABP), United Therapeutics Corporation (NASDAQ: UTHR), Medtronic plc (NYSE: MDT), and Quotient Limited (NASDAQ: QTNT) are some of Edelman’s popular stock picks as of the second quarter of 2021.
9. VBI Vaccines Inc. (NASDAQ:VBIV)
Edelman’s Stake Value: $184,392,000
Percentage of Joseph Edelman’s 13F Portfolio: 2.39%
Number of Hedge Fund Holders: 10
VBI Vaccines Inc. (NASDAQ: VBIV) is a Massachusetts-based company engaged in the development of treatments for infectious diseases and cancer. Founded in 1965, the company is ranked ninth on our list of the 10 best biotech stocks to buy according to Joseph Edelman’s Perceptive Advisors.
Latest data reveals that Joseph Edelman’s Perceptive Advisors is the leading investor in VBI Vaccines Inc. (NASDAQ: VBIV) as of the second quarter of 2021, with 55 million shares worth over $184 million.
As of the second quarter of 2021, 10 hedge funds out of the 873 funds tracked by Insider Monkey held stakes in VBI Vaccines Inc. (NASDAQ: VBIV), up from 7 in the preceding quarter. The total value of these stakes is over $194.6 million.
Apart from VBI Vaccines Inc. (NASDAQ: VBIV), United Therapeutics Corporation (NASDAQ: UTHR), Medtronic plc (NYSE: MDT), and Quotient Limited (NASDAQ: QTNT) are some of Edelman’s popular stock picks as of the second quarter of 2021.
8. Horizon Therapeutics Public Limited Company (NASDAQ:HZNP)
Edelman’s Stake Value: $185,875,000
Percentage of Joseph Edelman’s 13F Portfolio: 2.41%
Number of Hedge Fund Holders: 56
Horizon Therapeutics (NASDAQ: HZNP) is a biotechnology company producing treatments for severe inflammatory and autoimmune diseases. The company is ranked eighth on our list of the 10 best biotech stocks to buy according to Joseph Edelman’s Perceptive Advisors.
As per the latest 13F filings, Perceptive Advisors owned 1.98 million shares in the company at the end of the second quarter of 2021, worth over $185.8 million. Investment firm VenBio Select Advisor is the leading investor in Horizon Therapeutics Public Limited Company (NASDAQ: HZNP) with a stake worth $842.7 million.
On October 6, Jefferies gave a Buy rating on Horizon Therapeutics Public Limited Company (NASDAQ: HZNP) stock with a price target of $132. Akash Tewari, an analyst at the investment advisory, assumed the rating coverage.
As of the second quarter of 2021, 56 hedge funds out of the 873 funds tracked by Insider Monkey held stakes in Horizon Therapeutics Public Limited Company (NASDAQ: HZNP), up from 48 in the preceding quarter.
Investment management firm Carillon Tower Advisers mentioned Horizon Therapeutics Public Limited Company (NASDAQ: HZNP) in its Q1 2021 investor letter. Here’s what the firm said:
“Horizon Therapeutics is a biopharmaceutical company whose primary focus is research, development, and marketing of late-stage pharmaceutical products. After experiencing some unfortunate manufacturing hiccups in the later stages of 2020 for its key product Tepezza, which is used in the treatment of thyroid eye disease, the company recently received positive news that should relieve their supply issues going forward. With manufacturing of Tepezza back online after being forced to halt due to Operation Warp Speed’s COVID-19 vaccine production orders, Horizon expects patient treatments to resume in mid-April.”
Just like Horizon Therapeutics Public Limited Company (NASDAQ: HZNP), United Therapeutics Corporation (NASDAQ: UTHR), Medtronic plc (NYSE: MDT), and Quotient Limited (NASDAQ: QTNT) are some of Edelman’s popular stock picks as of the second quarter of 2021.
7. Collegium Pharmaceutical, Inc. (NASDAQ:COLL)
Edelman’s Stake Value: $189,723,000
Percentage of Joseph Edelman’s 13F Portfolio: 2.46%
Number of Hedge Fund Holders: 16
Collegium Pharmaceutical, Inc. (NASDAQ: COLL) specializes in the production of treatments for chronic pain. The company is ranked seventh on our list of the 10 best biotech stocks to buy according to Joseph Edelman’s Perceptive Advisors. As of the second quarter of 2021, Perceptive Advisors is the leading investor in Collegium Pharmaceutical, Inc. (NASDAQ: COLL) with 17.5 million shares, worth more than $189.7 million.
In August, investment advisory Cantor Fitzgerald downgraded Collegium Pharmaceutical, Inc. (NASDAQ: COLL) from Overweight to Neutral with a $22 price target, post the second-quarter results.
As of the second quarter of 2021, 16 hedge funds out of the 873 funds tracked by Insider Monkey held stakes in Collegium Pharmaceutical, Inc. (NASDAQ: COLL), up from 15 in the preceding quarter. The total value of these stakes is over $209.7 million.
Besides Collegium Pharmaceutical, Inc. (NASDAQ: COLL), United Therapeutics Corporation (NASDAQ: UTHR), Medtronic plc (NYSE: MDT), and Quotient Limited (NASDAQ: QTNT) are some of Edelman’s popular stock picks as of the second quarter of 2021.
6. Amicus Therapeutics, Inc. (NASDAQ:FOLD)
Edelman’s Stake Value: $222,890,000
Percentage of Joseph Edelman’s 13F Portfolio: 2.89%
Number of Hedge Fund Holders: 34
Amicus Therapeutics, Inc. (NASDAQ: FOLD) focuses on the invention of medical therapies for rare metabolic diseases. Founded in 2002, the company is ranked sixth on our list of the 10 best biotech stocks to buy according to Joseph Edelman’s Perceptive Advisors.
The latest 13F filings reveal that Perceptive Advisors is the leading investor in Amicus Therapeutics, Inc. (NASDAQ: FOLD) as of the second quarter of 2021 with 23.1 million shares worth over $222.8 million.
On September 30, JPMorgan upgraded Amicus Therapeutics, Inc. (NASDAQ: FOLD) from Neutral to Overweight with a price target of $16, noting the $600M sales of two treatments developed by Amicus.
As of the second quarter of 2021, 34 hedge funds out of the 873 funds tracked by Insider Monkey held stakes in Amicus Therapeutics, Inc. (NASDAQ: FOLD), up from 30 in the preceding quarter. The total value of these stakes is over $832 million.
In its Q1 2021 investment letter, investment management firm Carillon Tower Advisers mentioned Amicus Therapeutics, Inc. (NASDAQ: FOLD). Here’s what it had to say:
“Amicus Therapeutics is a biotechnology company focused on discovering, developing, and delivering novel high-quality medicines for people living with rare metabolic diseases. The firm’s shares slumped after it reported disappointing results in the phase three trial for its drug to be used in the treatment of late-onset Pompe disease (LOPD). Unfortunately, the trial data did not generate statistical significance in the primary endpoint.”
5. Iovance Biotherapeutics, Inc. (NASDAQ:IOVA)
Edelman’s Stake Value: $285,173,000
Percentage of Joseph Edelman’s 13F Portfolio: 3.7%
Number of Hedge Fund Holders: 30
Founded in 2007, Iovance Biotherapeutics, Inc. (NASDAQ: IOVA) is a biotechnology company advancing T cell-based immunotherapies for patients with blood cancer and tumors. The company is ranked fifth on our list of the 10 best biotech stocks to buy according to Joseph Edelman’s Perceptive Advisors.
13F filings show that Perceptive Advisors owned 10.95 million shares in Iovance Biotherapeutics, Inc. (NASDAQ: IOVA) at the end of the second quarter of 2021, worth over $285 million. Out of the hedge funds being tracked by Insider Monkey, ARK Investment Management is the leading investor in Iovance Biotherapeutics, Inc. (NASDAQ: IOVA) with a stake worth $480.1 million, representing 0.89% of the portfolio.
On June 10, JMP Securities upgraded Iovance Biotherapeutics, Inc. (NASDAQ: IOVA) to Outperform from Market Perform with a price target of $32.
In its Q2 2021 investor letter, investment management firm Artisan Partners shared its views on Iovance Biotherapeutics, Inc. (NASDAQ: IOVA). Here’s what the fund said:
“Iovance is the leader in tumor infiltrating lymphocyte (TIL) development and manufacturing. A TIL is a type of immune cell capable of recognizing and killing cancer cells. In cancer therapy, tumor-infiltrating lymphocytes are removed from a patient’s tumor, grown in large numbers in a laboratory and then given back to the patient to help the immune system fight the disease. Iovance’s manufacturing process is efficient, reliable and scalable which enables commercialization of this therapy.
Iovance’s first commercial drug to treat metastatic melanoma, Lifileucel, is experiencing difficulty gaining FDA approval. Iovance is working with the FDA to develop new methods to meet the agency’s manufacturing requirements. Unfortunately, the company’s CEO resigned in mid-May, prompting some analysts on the Street to question how far off the company and FDA are in reaching alignment. The company is expected to meet with the FDA later this year, though the FDA has been strained by the pandemic and an approval for Lifileucel has likely been pushed into 2022. Given the strong data around Lifileucel’s efficacy, we believe the drug is de-risked, and we are remaining patient.”
4. Travere Therapeutics, Inc. (NASDAQ:TVTX)
Edelman’s Stake Value: $384,422,000
Percentage of Joseph Edelman’s 13F Portfolio: 4.98%
Number of Hedge Fund Holders: 25
Travere Therapeutics, Inc. (NASDAQ: TVTX) is a California-based company engaged in the discovery and production of medical treatments for rare diseases. The company has secured the fourth rank on our list of the 10 best biotech stocks to buy according to Joseph Edelman’s Perceptive Advisors.
On September 17, wealth management firm Canaccord lowered the price target on Travere Therapeutics, Inc. (NASDAQ: TVTX) from $45 to $42 and maintained a Buy rating.
25 hedge funds out of the 873 tracked by Insider Monkey held stakes in Travere Therapeutics, Inc. (NASDAQ: TVTX) at the end of the second quarter of 2021, down from 27 in the preceding quarter.
3. SpringWorks Therapeutics, Inc. (NASDAQ:SWTX)
Edelman’s Stake Value: $399,681,000
Percentage of Joseph Edelman’s 13F Portfolio: 5.18%
Number of Hedge Fund Holders: 18
SpringWorks Therapeutics, Inc. (NASDAQ: SWTX) is placed third on our list of the 10 best biotech stocks to buy according to Joseph Edelman’s Perceptive Advisors. Headquartered in Connecticut, SpringWorks is working towards developing and commercializing life-saving medicines for people with chronic illnesses.
As per the latest data, Perceptive Advisors owned 4.84 million shares in SpringWorks Therapeutics, Inc. (NASDAQ: SWTX) at the end of the second quarter of 2021, worth $399.6 million.
As of the second quarter of 2021, the number of hedge fund positions in SpringWorks Therapeutics, Inc (NASDAQ: SWTX) declined to 18 in comparison to 22 positions in the preceding quarter.
2. BridgeBio Pharma, Inc. (NASDAQ:BBIO)
Edelman’s Stake Value: $472,862,000
Percentage of Joseph Edelman’s 13F Portfolio: 6.13%
Number of Hedge Fund Holders: 27
BridgeBio Pharma, Inc. (NASDAQ: BBIO) is ranked second on our list of the 10 best biotech stocks to buy according to Joseph Edelman’s Perceptive Advisors. Headquartered in California, the company engages in the development and production of medicines for genetic diseases.
According to the latest filings, Perceptive Advisors owned 7.75 million shares in BridgeBio Pharma, Inc (NASDAQ: BBIO) at the end of the second quarter of 2021, worth $472.8 million.
On September 10, Bank of America upgraded BridgeBio Pharma, Inc (NASDAQ: BBIO) from Neutral to Buy and kept the price target of $75, citing a positive outlook on the company’s upcoming trials.
At the end of the second quarter of 2021, 27 hedge funds in the database of Insider Monkey held stakes worth $2.79 billion in BridgeBio Pharma, Inc. (NASDAQ: BBIO), up from 26 hedge funds in the previous quarter. Moreover, the company beat the analysts’ EPS estimate of -$0.97 by $0.31 for the second quarter of 2021.
In its Q2 2021 investor letter, Baron Opportunity Fund mentioned BridgeBio Pharma, Inc. (NASDAQ: BBIO). Here’s what the fund said:
“BridgeBio Pharma, Inc. is a biotechnology company developing drugs that address a host of genetic disorders. Shares fell in the quarter given concerns around increasing competition. While we expect positive results from BridgeBio’s Phase 3 trial for its lead program for TTR amyloidosis, a disease in which toxic proteins build up in the heart and nerves, encouraging updates from Alnylam’s competing drug, Vitrusiran, and more recently, Intellia’s gene editing platform, pressured the stock. We exited our position.”
1. Mirati Therapeutics, Inc. (NASDAQ:MRTX)
Edelman’s Stake Value: $514,618,000
Percentage of Joseph Edelman’s 13F Portfolio: 6.67%
Number of Hedge Fund Holders: 55
Mirati Therapeutics, Inc. is a California-based clinical-stage biotechnology company that is working to produce breakthrough treatments for people diagnosed with cancer. Founded in 1995, Mirati Therapeutics, Inc. (NASDAQ: MRTX) actively seeks collaboration opportunities to delve deeper into the science behind tumor growth and development. 13F filings reveal that Perceptive Advisors owned around 3.19 million shares in Mirati Therapeutics, Inc. (NASDAQ: MRTX) at the end of the second quarter of 2021, worth over $514.6 million.
On September 22, investment advisory Stifel initiated a Buy rating on Mirati Therapeutics, Inc. (NASDAQ: MRTX) with a $202 price target, noting that the recent developments in the company’s clinical program Adagrasib put forward an expansion opportunity.
As of the second quarter of 2021, 55 hedge funds out of the 873 tracked by Insider Monkey held stakes worth $2.79 billion in Mirati Therapeutics, Inc. (NASDAQ: MRTX), in comparison to 57 funds in the preceding quarter.
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Disclosure: None. 10 Best Biotech Stocks to Buy According to Joseph Edelman’s Perceptive Advisors is originally published on Insider Monkey.
