LRT Capital Management, an investment management firm, published its third-quarter 2021 investor letter – a copy of which can be downloaded here. A return of +18.39% was recorded by the LRT Economic Moat strategy year-to-date, extending its 12-month returns to +35.34%. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
LRT Capital Management, in its Q3 2021 investor letter, mentioned Repligen Corporation (NASDAQ: RGEN) and discussed its stance on the firm. Repligen Corporation is a Waltham, Massachusetts-based bioprocessing company with a $15.8 billion market capitalization. RGEN delivered a 49.25% return since the beginning of the year, while its 12-month returns are up by 57.64%. The stock closed at $286.01 per share on November 26, 2021.
Here is what LRT Capital Management has to say about Repligen Corporation in its Q3 2021 investor letter:
“Based in Waltham, MA, Repligen makes equipment for the biologic drug manufacturing industry. The company’s main products are focus on filtration (48% of revenue), chromatography (20% of revenue), process analytics products (9% of revenue), as well as select proteins used in the manufacturing of biological drugs (22%). We believe that biological drugs represent the most exciting frontier of medicine today, with monoclonal antibodies and gene therapy amongst the most promising approaches to tackling rare diseases.
The manufacturing of biological drugs is very different from that of traditional, “small molecule” drugs. Whereas the construction of a traditional line for a traditional small molecule drug might cost as little as $5 million dollars, the development and scaling of a biological manufacturing line can cost well over $100 million. Every biological manufacturing process is different, but their common feature is that the active ingredient in the drug is created by living cells and usually consists of a complex protein that is administered to the patient by injection. In the most general of terms the manufacturing of a biological drugs has the following stages:
● Creation and selection of cell culture to produce desired protein.
● Growth and amplification of selected cells – usually in a bioreactor.
● Filtration, purification, and isolation of active ingredient.
● Testing, quality assurance and packaging.
Under CEO Tony Hunt, Repligen has successfully reoriented itself away from selling commoditized inputs to the biological manufacturing process, towards selling specialized proprietary equipment – largely accomplished through M&A. Revenue grew at a CAGR of 22% before Tony joined the company and at 41% since then. Importantly, this growth has not come at the expense of margins or ROIC, which have remained very strong throughout the period.”
Based on our calculations, Repligen Corporation (NASDAQ: RGEN) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. RGEN was in 35 hedge fund portfolios at the end of the third quarter of 2021, compared to 35 funds in the previous quarter. Repligen Corporation (NASDAQ: RGEN) delivered a 4.88% return in the past 3 months.
Disclosure: None. This article is originally published at Insider Monkey.