What Happened To Billionaire Seth Klarman’s Top Biotech Picks In The Third Quarter?

#2 Keryx Biopharmaceuticals (NASDAQ:KERX)

–  Shares held (as of June 30): 25.79 million
–  Total Value (as of June 30): $257 million
–  Percent of Portfolio (as of June 30): 4.29%

Keryx Biopharmaceuticals (NASDAQ:KERX) fell by 64.7% in the third quarter as sales of the company’s phosphate binder, Auryxia, indicated for the control of serum phosphorus in dialysis patients with chronic kidney disease, disappointed. Net U.S Auryxia product sales for the second quarter were just $1.8 million on 3,700 written prescriptions, while the company had a net loss of $26.8 million in the same time frame. Keryx is trying to drum up more revenues by potentially expanding to Europe and possibly expanding the indication of the treatment to patients with stages 3-5 non-dialysis dependent chronic kidney disease and iron deficiency anemia, who may be intolerant or have not previously responded to oral iron therapy. Given the $131 million in cash and cash equivalents on the balance sheet as of June, it isn’t too late for Keryx, but the company needs to get scripts written/sales up by one or two orders of magnitude before its cash runs low. Herb Wagner‘s Finepoint Capital owns 1.6 million shares.

#1 Theravance Inc (NASDAQ:THRX)

–  Shares held (as of June 30): 19.8 million
–  Total Value (as of June 30): $358 million
–  Percent of Portfolio (as of June 30): 5.96%

Theravance Inc (NASDAQ:THRX) is a royalty portfolio company with several launched products, including RELVAR for the treatment of COPD and/or asthma, and ANORO for the treatment of COPD. GSK commercializes the drugs, and Theravance is entitled to 15% royalty on the first $3 billion of RELVAR and ‘upward tiering of 6.5% to 10% royalties on annual global net sales’ of ANORO. The sales growth of RELVAR and ANORO didn’t meet expectations, however, leading to shares retreating by 59.6% in the third quarter. It didn’t help that a large-scale clinical trial also showed that Relvar/Breo Ellipta didn’t reduce cardiovascular disease outcomes in patients with COPD past their statistically relevant endpoints. Still, analysts are optimistic, and have a $13.83 price target on the stock.

Disclosure: None