2 Biotechs Billionaires are Loading Up on in 2017
August 23, 2017
By Alex Keown, BioSpace.com Breaking News Staff
NEW YORK – Heading into the later part of 2017, it’s time for savvy investors to begin looking for pharma and biotech stocks that will produce strong returns.
Writing in The Motley Fool analyst Matthew Frankel points to 10 stocks that he said billionaires and hedge fund managers are adding to their portfolio this year. While the list is fairly tech heavy, including Oracle, Microsoft and Alphabet, the parent company of Google, the list does include two pharma companies – AbbVie and Amgen.
In his piece, Frankel did not break down why those stocks are being sought by hedge fund managers. Since the end of October 2016, shares of AbbVie have steadily climbed from a low of $55.78 to as high as $74.63 in July. Shares are trading at $71.75 as of 10:18 a.m.
AbbVie’s stock was certainly helped earlier this month when the U.S. Food and Drug Administration approved Mavyret, a drug that will treat all types of HCV in an eight week timeframe. With the approval, AbbVie has rival HCV drugmaker Gilead Sciences squarely in its sights. AbbVie estimates that approximately 95 percent of U.S. HCV patients can be treated with Mavyret, including patients with compensated cirrhosis or without cirrhosis and those with limited treatment options, such as patients with chronic kidney disease.
Like AbbVie, shares of Amgen have steadily risen since the fall of 2016. The stock was at a low of $135.22 on Nov. 3 to hit a high of $182.60 in March. Shares are down slightly from that this morning, trading at $168.98 as of 10:26 a.m. Over the past several weeks, California-based Amgen has submitted several drugs to the FDA for approval, including Prolia for the treatment of patients with glucocorticoid-induced osteoporosis. The company is also seeking approval for ABP 980, a biosimilar candidate to cancer drug Herceptin. Earlier this month, Amgen also released data showing PCSK9 inhibitor Repatha was non-inferior to placebo when it came to a cognitive function study in cardiovascular patients.
While Frankel suggests AbbVie and Amgen are “buys” for the wise investor, there are also two pharma companies he said billionaires are getting rid of – Eli Lilly and Johnson & Johnson.
Eli Lilly has suffered several setbacks over the past year starting with its Alzheimer’s failure. After the FDA rejected its rheumatoid arthritis drug baricitinib in April, in July Lilly said there would be a significant delay in re-filing for approval. Lilly, along with its partner company Incyte Corporation, said the delay is expected to take a minimum of 18 months due to the FDA’s demand of a new clinical trial. Shares of Eli Lilly are trading at $78.28 this morning. Shares of Johnson & Johnson are down this morning, trading at $133.39.