In this article, we reviewed Jim Simons’ investment strategy, historical performance, and family office portfolio. We also examined 10 pharmaceutical stocks to buy according to Jim Simons’ Euclidean Capital.
Known as “Quant King”, billionaire Jim Simons is the founder of Renaissance Technologies, a hedge fund that uses mathematical models to pick stocks rather than relying on human intuitions. Wall Street calls him the greatest investor in the world amid stunning returns from his flagship Medallion Fund, which earned more than $100 billion in profits since its inception in 1988. In 2020, the fund posted an annual return of 76%, its third-best performance, just behind its 98.5% return in 2000 and 82.4% gain in 2008. The American mathematician, who was born in a poor family and worked in a garden supply store in his mid-teens, is now sitting on a net worth of $24.4 billion. He retired from Renaissance Technologies in 2010 but remains a non-executive chairman of the $130 billion quant hedge fund.
He established Euclidean Capital, a single-family office, in 2009 to invest in early-stage pharmaceutical companies and disruptive technologies. As of the end of the June quarter, Jim Simons’ Euclidean Capital held $427 million in 13F securities, and over 95% of the portfolio is composed of early-stage pharmaceutical stocks.
Jim Simons of Renaissance Technologies
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Let’s start examining the 10 pharmaceutical stocks to buy according to Jim Simons’ Euclidean Capital. For this article, we analyzed Euclidean Capital’s 13F portfolio as of the end of the second quarter.
10 Pharmaceutical Stocks to Buy According to Jim Simons’ Euclidean Capital
10. Beam Therapeutics Inc. (NASDAQ:BEAM)
Euclidean Capital’s Stake Value: $4.007 million
Percentage of Euclidean Capital’s 13F Portfolio: 0.93%
Number of Hedge Fund Holders: 21
Biotechnology company Beam Therapeutics Inc. (NASDAQ:BEAM) generated a staggering 160% share price return for its shareholders since debuting on NASDAQ in June of 2020. Beam Therapeutics Inc. (NASDAQ:BEAM) is a member of Euclidean Capital since the first quarter of 2021.
Catherine D. Wood’s ARK Investment Management was the largest shareholder in the company, with 9.9% ownership, as of the end of June quarter. Redmile Group and Hillhouse Capital Management were the second and third largest stakeholders in Beam Therapeutics Inc. (NASDAQ:BEAM).
9. Nurix Therapeutics, Inc. (NASDAQ:NRIX)
Euclidean Capital’s Stake Value: $4.097 million
Percentage of Euclidean Capital’s 13F Portfolio: 0.95%
Number of Hedge Fund Holders: 17
Shares of the small-cap Nurix Therapeutics, Inc. (NASDAQ:NRIX) remained under pressure in the past couple of months amid broader market trends. Nurix Therapeutics, Inc. (NASDAQ:NRIX) revenues grew 67% year over year in the June quarter and the company is on track for three more phase 1 clinical trials in 2021.
Like 23andMe Holding Co. (NASDAQ:ME), Jim Simons’ Euclidean Capital initiated a brand new position in Nurix Therapeutics, Inc. (NASDAQ:NRIX) during the June quarter.
8. Foghorn Therapeutics Inc. (NASDAQ:FHTX)
Euclidean Capital’s Stake Value: $13.4 million
Percentage of Euclidean Capital’s 13F Portfolio: 3.14%
Number of Hedge Fund Holders: 5
Euclidean Capital first initiated a position in Foghorn Therapeutics Inc. (NASDAQ:FHTX) in the fourth quarter of 2021 and left its position unchanged during the second quarter of 2021. Following strong gains early in 2021, shares of Foghorn Therapeutics Inc. (NASDAQ:FHTX) are now trading in the low teen range. Foghorn Therapeutics Inc. (NASDAQ:FHTX) ended the June quarter with $141.3 million in cash, cash equivalents, and marketable securities, down from $160.9 million as of March 31, 2021.
Jim Simons was the leading stakeholder in Foghorn Therapeutics Inc. (NASDAQ:FHTX) at the end of June. Of the 873 elite funds tracked by Insider Monkey, 5 were bullish on the small-cap biotechnology company compared to 8 positions in the previous quarter.
7. ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC)
Euclidean Capital’s Stake Value: $17.6 million
Percentage of Euclidean Capital’s 13F Portfolio: 4.12%
Number of Hedge Fund Holders: 11
ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC) stock price lost almost half of its value since the beginning of this year. However, shares of the company recovered after a positive note from Jefferies analyst Maury Raycroft, who maintained a Buy rating for ORIC Pharmaceuticals, Inc. (NASDAQ:ORIC) stock with a $34 price target. The analyst sees strong prospects for ORIC-101 to win approval.
6. Alector, Inc. (NASDAQ:ALEC)
Euclidean Capital’s Stake Value: $20.43 million
Percentage of Euclidean Capital’s 13F Portfolio: 4.77%
Number of Hedge Fund Holders: 18
Alector, Inc. (NASDAQ:ALEC) is one of the top pharmaceutical stocks to buy due to its stellar run of 126% over the past 12 months, driven by encouraging data from its leading AL001 open-label Phase 2 study in FTD-GRN. Moreover, the announcement about global collaboration with GSK for the development and commercialization of progranulin-elevating monoclonal antibodies, AL001 and AL101, also added to investors’ sentiments.
Euclidean Capital has been holding a position in Alector, Inc. (NASDAQ:ALEC) since the fourth quarter of 2020. Other hedge funds have also expressed interest in the company. The number of long hedge funds positions increased to 18 as of the end of the second quarter of 2021 compared to 15 positions in the earlier quarter.
5. RAPT Therapeutics, Inc. (NASDAQ:RAPT)
Euclidean Capital’s Stake Value: $23.39 million
Percentage of Euclidean Capital’s 13F Portfolio: 5.46%
Number of Hedge Fund Holders: 21
Shares of RAPT Therapeutics, Inc. (NASDAQ:RAPT), a clinical-stage immunology-based biotechnology company, surged 59% since the beginning of this year, with most of the rally coming in the past three months amid positive results for RPT193 in early-stage atopic dermatitis study.
4. Denali Therapeutics Inc. (NASDAQ:DNLI)
Euclidean Capital’s Stake Value: $25.39 million
Percentage of Euclidean Capital’s 13F Portfolio: 5.93%
Number of Hedge Fund Holders: 22
Denali Therapeutics Inc. (NASDAQ:DNLI), a developer of therapeutic candidates for neurodegenerative diseases, has lost 32% since the beginning of the year. Despite significant gains, rating firms look bullish over Denali’s pipeline. Oppenheimer initiated coverage of Denali Therapeutics with an Outperform rating and $85 stock price target.
3. NGM Biopharmaceuticals, Inc. (NASDAQ:NGM)
Euclidean Capital’s Stake Value: $29.44 million
Percentage of Euclidean Capital’s 13F Portfolio: 6.88%
Number of Hedge Fund Holders: 19
The stock price of NGM Biopharmaceuticals, Inc. (NASDAQ:NGM) plunged sharply this year after the company abandoned its NASH candidate following phase 2 failure. Nevertheless, the market analysts highlighted confidence in the company’s stock after NGM Biopharma showed advancement in a Phase 2 study of NGM621, a monoclonal antibody to potentially inhibit complement C3.
Hedge funds sentiment also increased in NGM lately. The number of long hedge funds positions increased to 19 as of the end of the second quarter of 2021 from 18 in the prior period.
2. 23andMe Holding Co. (NASDAQ:ME)
Euclidean Capital’s Stake Value: $119 million
Percentage of Euclidean Capital’s 13F Portfolio: 27.98%
Number of Hedge Fund Holders: N/A
Euclidean Capital initiated a new position in 23andMe Holding Co. (NASDAQ:ME) in the second quarter of 2021 by purchasing 10.2 million shares. Nevertheless, the stock price bounced back after hitting a 52-weeks low of $8 at the beginning of October, thanks to price target upgrades and positive comments from EMJ Capital founder Eric Jackson.
As of the end of June, Jim Simons’ Euclidean Capital was the leading stakeholder in the company while Eli Casdin’s Casdin Capital was the second-largest hedge fund shareholder.
1. PMV Pharmaceuticals, Inc. (NASDAQ:PMVP)
Euclidean Capital’s Stake Value: $133 million
Percentage of Euclidean Capital’s 13F Portfolio: 31.2%
Number of Hedge Fund Holders: 18
The share price of PMV Pharmaceuticals, Inc. (NASDAQ:PMVP), the largest stock holding of billionaire Jim Simons’ Euclidean Capital, has been struggling to rebound so far this year. Meanwhile, some firms are seeing the dip as a buying opportunity. Goldman Sachs lifted its price target for PMV Pharmaceuticals to $43 with a Buy rating, citing strong data for its p53 reactivator PC14586, which is in Phase 1 trial for solid tumors.
You can also take a look at Goldman Sachs Stock Portfolio: Top 10 Stocks and 10 Pharmaceutical Stocks to Buy According to Lawrence Hawkins’ Prosight Capital.
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Disclosure: None. 10 Pharmaceutical Stocks to Buy According to Jim Simons’ Euclidean Capital is originally published on Insider Monkey.
