5 Best Pharmaceutical Stocks to Buy According to Cathie Wood

3. Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN)

Wood’s Stake Value: $576,743,000
Percentage of Cathie Wood’s 13F Portfolio: 1.14%
Number of Hedge Fund Holders: 39

Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) manufactures, develops, discovers, and commercializes medicines for several medical conditions across the globe. It was founded in 1988 and is placed third on our list of 10 best pharmaceutical stocks to buy, according to Cathie Wood. Regeneron stock has returned more than 8% to investors over the three months.

Sanofi (NASDAQ: SNY) and Regeneron announced results from the Phase 3 trial of Dupixent in which the treatment was able to reduce asthma attacks and improve lung function in kids between the ages of 6 and 11. For Q1 2021, the company’s revenue increased 38% QoQ to $2.53 billion, while the diluted EPS stood at $10.09. Last month, the stock was upgraded at BMO Capital to “Outperform” from “Market Perform.” The firm set a price target of $630.

The hedge fund managed by Wood owns more than 1.2 million shares in the company worth over $576 million, representing close to 1.14% of their portfolio. ARK Investment has upped its stake in the firm by 170% in the last quarter.

In its Q1 2021 investor letter, Polen Capital, an asset management firm, highlighted a few stocks, and Sanofi (NASDAQ: SNY) was one of them. Here is what the fund said:

“We eliminated our position in Regeneron Pharmaceuticals also to help fund the Amazon addition. Regeneron’s revenue and earnings continue to grow roughly in line with our expectations. We believe Regeneron has a differentiated R&D model that has allowed it to bring novel biologic therapies to market in several therapeutic areas. That said, we believe Regeneron has intermediate-term risks that make a continued holding more difficult, particularly considering the recent opportunities we have seen for the Portfolio.

The company’s largest drug, Eylea, may face increasing competition as new competitive therapies have been approved, albeit without Eylea’s advantaged safety profile. In addition, the end of Eylea’s patent life coincides with a period when the U.S. government is seeking avenues to lower the reimbursement for certain drugs like Eylea. We believe Regeneron has many opportunities for continued growth in the coming years, and the competitive advantages from its proprietary drug development process remain intact. However, we feel the investment opportunity in Amazon was a better use of capital.”