The biotech sector is well known for its M&A activity, but billionaire fund managers don’t seem to be attracted by the frenzy. They seem to prefer biotech giants that buy up smaller innovative companies or products, develop them, squeeze all the juice and then they are back in the market looking for new acquisitions. Last year M&A activity in the sector reached the $200 billion mark and analysts believe this year could be even better, as some of the companies that have already bolstered their portfolio are still hungry for more, while other cash-rich companies have not yet even entered the market. If you are looking to add some biotech giants to your portfolio, it would be a good idea to have a clue what billionaire fund managers think of them.
We begin with Exelixis Inc. (NASDAQ:EXEL), a company that focuses on cancer treatment solutions. At the end of the 2017 third quarter, the stock could be found in the equity portfolios of 7 billionaire fund managers, unchanged compared to the previous quarter. The largest stake in Exelixis Inc. (NASDAQ:EXEL) was held by Jim Simons’ Renaissance Technologies, which indicated ownership of 3.79 million shares in its latest 13F filing. David E Shaw’s D E Shaw is also betting big on Exelixis, having amassed a little over 2.07 million shares.
Together with IPSEN (OTCMKTS:IPSEY), Exelixis Inc. (NASDAQ:EXEL) has recently announced positive results in late-stage study of Cabometyx (cabozantinib). Although the drug has already been approved in the United States for the treatment of patients with advanced renal cell carcinoma (RCC), Exelixis and IPSEN have found that it can help patients suffering from advanced hepatocellular carcinoma survive an average of 2.2 months longer. The companies announced plans to submit a supplemental New Drug Application with the FDA by the end of the current quarter.
On par with Exelixis is Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), which was also held by 7 billionaire fund managers at the end of the third quarter. Israel Englander’s Millennium Management stepped up its interest in Vertex Pharmaceuticals, having increased their stake by 114% to 1.67 million shares. Jim Simons’ Renaissance Technologies has also loaded up on Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), having amassed 1.37 million shares by the end of September.
On Wednesday, Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) issued its fourth quarter financial results, managing to surpass analysts’ expectations. The company reported adjusted earnings of $0.61 per share on the back of $651.6 million in revenue, ahead of analysts’ estimates of $0.58 in earnings per share and $596.1 million in revenue. The stock is touted mainly as a Buy with a consensus price target of $175.75, which represents and upside potential of 8.8%.