Artisan Mid Cap Fund recently released its Q1 2020 Investor Letter, a copy of which you can download below. The fund posted a return of -11.55% for the quarter (investor class), outperforming their benchmark, the Russell Midcap Index which returned -27.07% in the same quarter. You should check out Artisan Mid Cap Fund’s top 5 stock picks which helped them beat the market by nearly 16 percentage points. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.
In the said letter, Artisan Mid Cap Fund highlighted a few stocks and Halozyme Therapeutics Inc. (NASDAQ:HALO) is one of them. Halozyme Therapeutics is a biotechnology company based in California. Year-to-date, HALO stock gained 36.2% and on May 8th it had a closing price of $23.61. Its market cap is of $3.33 billion. Here is what Artisan Mid Cap Fund said:
“Halozyme is a biotechnology firm that licenses to pharmaceutical companies the use of its proprietary enzyme—its ENHANZE® platform—which aids delivery of biologics subcutaneously, as opposed to intravenously. The benefit is improved absorption and convenience to patients and physicians. The company has established partnerships with leading biopharma companies—Roche, Johnson and Johnson (JNJ), Bristol-Myers Squibb and Argenx—and ENHANZE is already used in three approved products. A fourth approval is pending for JNJ/Genmab’s Darzalex SC, a subcutaneous treatment for multiple myeloma, which we believe will come through later this year and become a large driver of royalty revenue over time. Furthermore, the company decided in late 2019 to fully exit its highly capitalintensive drug-development business, which we believe simplifies the business, reduces the company’s exposure to binary events and should lead to significant cash flow growth and margin expansion over time. We used the recent market pullback to initiate a position at what we believe is an attractive valuation.”
In Q4 2019, the number of bullish hedge fund positions on HALO stock decreased by about 4% from the previous quarter (see the chart here), so various other hedge fund managers don’t seem to agree with HALO’s growth potential. Notably, Halozyme has established a partnership with leading biopharma company Johnson & Johnson (NYSE:JNJ) for the use of ENHANZE.
Disclosure: None. This article is originally published at Insider Monkey.