Orbimed reported a position of 4.6 million shares in Merck & Co., Inc. (NYSE:MRK), a 33% increase from three months earlier. Point State Capital, which is managed by Sean Cullinan and other former portfolio managers at billionaire Stanley Druckenmiller’s Duquesne Capital, was also a heavy buyer of Merck. Research more stocks Point State was buying. Merck, similarly to Pfizer, carries trailing and forward P/E multiples of 19 and 12 respectively. Its financial performance has been steady.
Gilead Sciences, Inc. (NASDAQ:GILD), a $59 billion market cap biotech company, was another of Isaly’s picks. Revenue was up 14% in Gilead’s most recent quarterly report compared to the third quarter of 2011, though net income actually decreased 9%. The stock is up 74% in the last year, bringing the valuation to 24 times trailing earnings. Billionaire Steve Cohen’s SAC Capital Advisors increased its stake in Gilead to a total of 3.1 million shares (find Cohen’s favorite stocks).
Orbimed also liked Abbott Laboratories (NYSE:ABT), with 2.5 million shares in its portfolio after moderate buying activity in Q3. Analyst consensus for 2013 implies a P/E multiple of 17; revenue was about flat in the third quarter of 2012 versus a year earlier. Southeastern Asset Management, managed by Mason Hawkins, was another major holder of the stock.
The fund trimmed its stake in Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) by 8% but the $5.6 billion market cap biotech company remained one of Orbimed’s top five picks. Adage Capital Management, run by Phil Gross and Robert Atchinson, moved heavily into Onyx (see more stocks Adage likes). Onyx is actually expected to be unprofitable for both 2012 and 2013, but is up 88% in the last year.