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Is Emisphere Technologies (EMIS) a Smart Long-term Buy?

Summers Value Partners recently released its Q3 2020 Investor Letter, a copy of which you can download here. The fund posted a return of -1.2% in the first nine months of 2020, outperforming its benchmark, the Russell 2000 Index which returned -9.6% in the same period. You should check out Summers Value Partners’ top 5 stock picks for investors to buy right now, which could be the biggest winners this year.

In the said letter, Summers Value Partners highlighted a few stocks and Emisphere Technologies Inc (NYSE:EMIS) is one of them. Emisphere Technologies Inc (NYSE:EMIS) is a pharmaceutical company. Year-to-date, Emisphere Technologies Inc (NYSE:EMIS) stock gained 3.5% and on October 15th it had a closing price of $7.89. Here is what Summers Value Partners said:

“Emisphere receives royalties on Rybelsus (oral semaglutide), which is approved and marketed globally by Novo Nordisk for Type 2 diabetes. Rybelsus is the first and only oral GLP-1 drug to be marketed to this patient population. The launch of Rybelsus continues to progress favorably aided by the recently initiated direct-to-consumer advertising campaign in the United States. As of the most recent week of prescription data, the drug was annualizing at $400 million in sales. We believe that Rybelsus is positioned to reach at least $10 billion in global sales, which will drive royalties to Emisphere of $250-400 million annually along with significant milestone payments.

Novo Nordisk recently initiated pharmacokinetic studies evaluating higher doses of Rybelsus (25mg and 50mg). We believe these exploratory trials are the first step toward an eventual weight loss indication. Ozempic (injectable semaglutide) showed amazing weight loss benefits in the STEP trials at higher doses and will be filed for a weight loss indication this quarter. Based on the success of Ozempic in the STEP trials, we have a high degree of confidence that higher doses of Rybelsus could also be approved for a weight loss indication in the future. As it is estimated that 80 million adults are clinically obese in the United States, this new indication would represent a significant market opportunity.

Our price target on EMIS is $20 per share based on the significant earnings potential associated with the Rybelsus royalty stream. We recently posted a presentation outlining the Emisphere opportunity on our website and it can be accessed here.”

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Our calculations showed that Emisphere Technologies Inc (NYSE:EMIS) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free enewsletter below to receive our stories in your inbox:

Disclosure: None. This article is originally published at Insider Monkey.