In this article we discuss the 5 best pharmaceutical stocks to buy according to Cathie Wood. If you want to read our detailed analysis of Wood’s history and hedge fund performance, go directly to the 10 Best Pharmaceutical Stocks to Buy According to Cathie Wood.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, advertising technology one of the fastest growing industries right now, so we are checking out stock pitches like this under-the-radar adtech stock that can deliver 10x gains. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind, let’s take a look at Cathie Wood’s top pharma stock picks:
5. CRISPR Therapeutics AG (NASDAQ: CRSP)
Wood’s Stake Value: $1,010,179,000
Percentage of Cathie Wood’s 13F Portfolio: 2.0065%
Number of Hedge Fund Holders: 27
CRISPR Therapeutics AG (NASDAQ: CRSP) develops gene-based medicines and was founded in 2013. It is ranked fifth on our list of 10 best pharmaceutical stocks to buy, according to Cathie Wood. CRISPR stock has returned more than 73% to investors during the course of the past twelve months.
In May, Evercore ISI upgraded the stock to “Outperform” as it believes that CRISPR would be the first to get approval for gene editing product. Further, CRISPR and Nkarta, Inc. (NASDAQ: NKTX) will develop CRISPR/Cas9 gene-edited cell therapies to cure cancer. In April, Jefferies upgraded the stock to “Buy” from “Hold.”
The hedge fund run by Wood owns more than 8.2 million shares in the media company worth over $1 billion, representing 2% of their investment portfolio. ARK Investment has reduced its activity on CRISPR stock by 21% in the past quarter.
4. Incyte Corporation (NASDAQ: INCY)
Wood’s Stake Value: $242,847,000
Percentage of Cathie Wood’s 13F Portfolio: 0.49%
Number of Hedge Fund Holders:
Incyte Corporation (NASDAQ: INCY) discovers, develops, and commercializes proprietary therapeutics globally. It was founded in 1991 and is placed fourth on our list of 10 best pharmaceutical stocks to buy, according to Cathie Wood.
The company’s study testing ruxolitinib treatment has met its goal and has demonstrated good results in patients. Incyte will submit the application for ruxolitinib for atopic dermatitis in the second half of 2021. For Q1 2021, the company’s revenue was up 1% YoY to $466 million. Incyte has full-year revenue expectations of $2.125-$2.20 billion.
ARK Investment holds more than 2.9 million shares in the biopharmaceutical firm worth over $242 million, representing 0.49% of their investment portfolio. ARK Investment has upped their Incyte Corporation (NASDAQ: INCY) stake by 68% the previous quarter.
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.”
2. Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX)
Wood’s Stake Value: $369,406,000
Percentage of Cathie Wood’s 13F Portfolio: 0.73%
Number of Hedge Fund Holders: 68
Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX) develops and commercializes therapies to treat cystic fibrosis. It is ranked second on our list of 10 best pharmaceutical stocks to buy, according to Cathie Wood.
Vertex has purchased development and commercialization rights to VX-561 from Concert Pharmaceuticals, Inc. (NASDAQ: CNCE) for an amount of $32 million. Vertex also announced results for Q1 2021, where its product revenue increased 14% YoY, while net product revenue jumped 6% YoY to $1.25 billion in the US and 43% YoY to $470 million outside the US.
ARK Investment owns more than 1.7 million shares in the company worth over $369.40 million, representing 0.16% of their portfolio. Out of the hedge funds being tracked by Insider Monkey, Renaissance Technologies is a leading shareholder in Vertex Pharmaceuticals Incorporated (NASDAQ: VRTX), with 2.40 million shares worth more than $515 million.
In its Q4 2020 investor letter, Alger, an asset management firm, highlighted a few stocks, and Sanofi (NASDAQ: SNY) was one of them. Here is what the fund said:
“Vertex Pharmaceuticals has become the world’s leading cystic fibrosis company by introducing the first drugs that treat the underlying disease rather than just the symptoms. Cystic fibrosis is caused by genetic abnormalities. Vertex has been able to target the proteins made by defective genes and allow them to function more normally. The shares detracted from portfolio performance when Vertex announced a disappointment in its drug discovery efforts for VX-814, one of two treatments the company is developing for Alpha-1Antitrypsin Deficiency (AATD), a genetic disorder that causes lung and liver disorders. The very surprising results were released three months earlier than expected and are delaying the development of the AATD drug.”
1. AbbVie Inc. (NYSE: ABBV)
Wood’s Stake Value: $59,858,000
Percentage of Cathie Wood’s 13F Portfolio: 0.11%
Number of Hedge Fund Holders: 72
AbbVie Inc. (NYSE: ABBV) develops, manufactures, discovers, and sells pharmaceuticals across the globe and was founded in 2012. It is placed first on our list of 10 best pharmaceutical stocks to buy, according to Cathie Wood. AbbVie stock has returned more than 24% to investors over the course of the past twelve months.
AbbVie’s Venclyxto has been by approved European Commission to treat acute myeloid leukemia, found in adult patients. For Q1 2021, the company reported net revenue of $13.01 billion, up 51% YoY. EPS during the quarter was $2.95. The company has raised its FY 2022 EPS guidance to $7.27-$7.47 from earlier set guidance of $6.69 and $6.89.
ARK Investment holds more than 553,117 shares in the company worth over $59 million, representing 0.11% of their portfolio. ARK Investment added AbbVie to its portfolio in the last quarter. Out of the hedge funds being tracked by Insider Monkey, Berkshire Hathaway is a leading shareholder in AbbVie Inc. (NYSE: ABBV), with 22.87 million shares worth more than $2.47 billion.
You can also take a peek at Top Pharmaceutical Companies in India and Top 10 Health Insurance Stocks to Buy.
