Investing in drug companies can be very lucrative if you know what you are doing. Unfortunately most investors are experts in narrowly defined fields and can’t judge the potential of drug companies. Instead of putting in the hours to research everything, or taking a blind chance, keeping an eye on what hedge funds are buying can be a smart move. They have teams of analysts keeping an eye on the market and researching individual companies. You may not have an insider track necessarily, but these funds report their holdings once a quarter – more than often enough for a do-it-yourself investor to profit by mimicking their top moves. Here is a list of drug companies that hedge funds are into right now:
Teva Pharmaceutical, Ltd. (NYSE:TEVA): Of the 300+ hedge funds we track, 43 were invested in TEVA at the end of the third quarter, compared to 49 at the end of the second quarter. Total hedge fund investment declined even further, moving from $2.09 billion at the end of June to $1.19 billion at the end of September. Jeffrey Altman’s Owl Creek Asset Management had $180.96 million in TEVA at the end of the third quarter while Boykin Curry’s Eagle Capital Management had $137.68 million invested in the company.
Forest Laboratories, Inc. (NYSE:FRX): Hedge fund investment in FRX slipped slightly in the third quarter, slipping from $1.12 billion across 23 hedge funds at the end of June to $1.04 billion over 21 funds at the end of September. FRX is a major part of Carl Icahn’s Icahn Capital Lp. The company makes up 7.2% of Icahn’s portfolio after he upped the fund’s stake by +31% in the third quarter, in a position valued at $803.09 million.
Allergan, Inc. (NYSE:AGN): There were 19 hedge funds invested in AGN at the end of the third quarter, down from 24 funds at the end of the second quarter. Total hedge fund investment in AGN also fell, going from $1.08 billion at the end of June to $1.02 billion at the end of September. Ken Fishers’ Fisher Asset Management had $352.68 million invested in AGN at the end of September after upping its stake in the company by +1% in the third quarter.
Pharmasset, Inc. (VRUS): The number of hedge funds invested in VRUS did not change in the third quarter, but total hedge fund investment in the company increased from $699.16 million across 21 funds at the end of June to $789.79 million over 21 funds at the end of September. Julian Baker and Felix’s Baker’s Baker Bros. Advisors upped its stake in VRUS by +103% in the third quarter, boosting its position in the company to $337.19 million. Daniel Gold’s QVT Financial is also a fan of VRUS.
Vertex Pharmaceuticals, Inc. (NASDAQ:VRTX): The number of hedge funds invested in VRTX increased during the third quarter from 11 at the end of June to 12 at the end of September, while total hedge fund investment in the fund slipped slightly from $435.44 million at the end of the second quarter to $429.80 million at the end of the third quarter. Bain Capital’s Brookside Capital increased its stake in VRTX by +31% during the third quarter, to close September with a position in the company valued at $230.74 million.
Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN): While the number of hedge funds invested in ALXN decreased from 21 at the end of the second quarter to 20 at the end of the third quarter, the total volume of hedge fund investment in the company increased dramatically, from $187.54 million at the end of June to $243.99 million at the end of September. Andreas Halvorsen’s Viking Global initiated a new position in ALXN worth $45.59 million in the third quarter. Louis Bacon’s Moore Global Investments also opened a new position in the company during the third quarter.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.