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10 Best Biotech Stocks to Buy According to Mark Lampert’s Biotechnology Value Fund

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·7 min read
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In this article, we discuss the 10 best biotech stocks to buy according to Mark Lampert. You can skip our detailed analysis of Lampert's Biotechnology Value Fund, and go directly to the 5 Best Biotech Stocks to Buy According to Mark Lampert's Biotechnology Value Fund.

Mark Lampert is an American investor who founded BVF Partners Ltd. in 1993. Currently, he is serving as a partner in the firm. BVF Partners is a private biotechnology firm based in San Francisco and manages Biotechnology Value Fund, L.P.

Lampert has always had a keen interest in the biotech sector and has been active in the field since 1984. Before founding BVF Inc., he worked as a Vice President at Oppenheimer, an American multinational investment bank. He also founded Biotechnology Royalty Corp. and held senior positions at Cambridge NeuroScience and NutraSweet Co. A Harvard graduate, Lampert is also serving as the founder donor of the Lampert-Byrd Foundation and GiveDirectly.org.

Biotech stocks have always reaped profits for shareholders in the past. With the onset of Covid-19 in 2020, the popularity of these stocks increased dramatically. According to a report published by Torreya Partners LLC, the NASDAQ Biotechnology Index (NBI), which represents over 98% of the U.S.-listed biotech companies, was up 73% of the time in the past 27 years. Most recently, small-cap biotech companies are outperforming the large caps because of their continuous innovation and deployment of new technology in relative operations. The NASDAQ Small-Cap Biotech Index returned 68% in 2020, while NBI was up 26%. Some of the notable biotech companies include AstraZeneca PLC (NASDAQ:AZN), AbbVie Inc. (NYSE:ABBV), Abbott Laboratories (NYSE:ABT), Johnson & Johnson (NYSE:JNJ), and Merck & Co. (NYSE:MRK).

Biotechnology Value Fund, L.P. is a private investment partnership, which specializes in public biotech investments. The firm mainly focuses on long-term investments in small-cap biotech companies. As of Q2, Biotechnology Value Fund, L.P. closed positions in 6 holdings and bought stakes in 5 companies. The fund’s 13F portfolio is valued at over $2.6 billion, up 1% from the previous quarter.

Our Methodology:

Let's analyze our list of the best biotech stocks to buy according to Mark Lampert. For this list, we considered Lampert's hedge fund, Biotechnology Value Fund's 13F portfolio as of Q2.

10 Best Biotech Stocks to Buy According to Mark Lampert
10 Best Biotech Stocks to Buy According to Mark Lampert

Photo by National Cancer Institute on Unsplash

Why pay attention to hedge fund sentiment while choosing stocks?

Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by wide margins. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the S&P 500 ETF (SPY). Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

10 Best Biotech Stocks to Buy According to Mark Lampert

10. Verastem, Inc. (NASDAQ:VSTM)

Biotechnology Value Fund’s Stake Value: $45,935,000

Percent of Biotechnology Value Fund’s 13F Portfolio: 1.72%

Number of Hedge Fund Holders: 21

Verastem, Inc. (NASDAQ:VSTM) showed a positive hedge fund sentiment in Q2, as the number of hedge funds in the Insider Monkey database having stakes in the company increased to 21, from 12 in the previous quarter. The total worth of these stakes is $241.4 million.

In Q2, BVF owns over 11.2 million shares in Verastem, Inc. (NASDAQ:VSTM), valued at roughly $46 million. The company represents 1.72% of the hedge fund’s 13F portfolio.

In Q2, Verastem, Inc. (NASDAQ:VSTM) reported revenue of $0.5 million, beating the estimates by $0.45 million.

9. 4D Molecular Therapeutics, Inc. (NASDAQ:FDMT)

Biotechnology Value Fund’s Stake Value: $48,301,000

Percent of Biotechnology Value Fund’s 13F Portfolio: 1.81%

Number of Hedge Fund Holders: 12

4D Molecular Therapeutics, Inc. (NASDAQ:FDMT) stands ninth on our list of the best biotech stocks to buy according to Mark Lampert. Recently, the company’s drug 4D-125 showed promising results in patients with advanced X-linked retinitis pigmentosa.

Viking Global is the leading shareholder of 4D Molecular Therapeutics, Inc. (NASDAQ:FDMT), with shares worth $94.8 million. In addition, 12 hedge funds tracked by Insider Monkey have stakes in the company in Q2, down from 18 in the previous quarter. The total worth of these stakes is over $253 million.

In Q2, BVF increased its stake in 4D Molecular Therapeutics, Inc. (NASDAQ:FDMT) by 95% and now holds over 2 million shares in the company, worth $48.3 million.

Like AstraZeneca PLC (NASDAQ:AZN), AbbVie Inc. (NYSE:ABBV), Abbott Laboratories (NYSE:ABT), Johnson & Johnson (NYSE:JNJ), and Merck & Co. (NYSE:MRK), 4D Molecular Therapeutics, Inc. (NASDAQ:FDMT) is also favored by investors in 2021.

8. AC Immune SA (NASDAQ:ACIU)

Biotechnology Value Fund’s Stake Value: $67,763,000

Percent of Biotechnology Value Fund’s 13F Portfolio: 2.53%

Number of Hedge Fund Holders: 13

AC Immune SA (NASDAQ:ACIU) is a Switzerland-based biotech company that focuses on medicines with neurodegenerative diseases. In Q2, BVF increased its position in the company by 14% and now holds over 8.5 million shares, valued at $67.7 million. The company represents 2.53% of the hedge fund’s 13F portfolio.

As of Q2, 13 hedge funds in the Insider Monkey database have stakes in AC Immune SA (NASDAQ:ACIU), the same as in the previous quarter. The total value of these stakes is $104.8 million.

7. Arcus Biosciences, Inc. (NYSE:RCUS)

Biotechnology Value Fund’s Stake Value: $76,828,000

Percent of Biotechnology Value Fund’s 13F Portfolio: 2.87%

Number of Hedge Fund Holders: 22

Arcus Biosciences, Inc. (NYSE:RCUS) is a clinical-stage biotech company that mainly develops therapies for serious diseases, such as cancer. Recently, BTIG initiated its coverage on the company with a Buy rating and a $57 price target, emphasizing the company’s importance in broader immune therapies.

Partner Fund Management is the leading shareholder of Arcus Biosciences, Inc. (NYSE:RCUS), owning roughly 3.5 million shares. Overall, 22 hedge funds tracked by Insider Monkey reported having stakes in the company in Q2, down from 27 in the previous quarter. The total value of these stakes is $403.6 million.

In Q2, BVF increased its position in Arcus Biosciences, Inc. (NYSE:RCUS) by 50% and now owns 2.8 million shares, valued at $76.8 million. The company constitutes 2.87% of the hedge fund’s 13F portfolio.

6. XOMA Corporation (NASDAQ:XOMA)

Biotechnology Value Fund’s Stake Value: $120,038,000

Percent of Biotechnology Value Fund’s 13F Portfolio: 4.49%

Number of Hedge Fund Holders: 4

XOMA Corporation (NASDAQ:XOMA) is an American biotech royalty aggregator. In Q2, BVF holds over 3.5 million shares in the company, valued at $120 million. The company represents 4.49% of the hedge fund’s 13F portfolio. XOMA Corporation (NASDAQ:XOMA) stands sixth on our list of the best biotech stocks to buy according to Mark Lampert.

In Q2 2021, XOMA Corporation (NASDAQ:XOMA) posted a GAAP EPS of -$0.31, beating the estimates by $0.03. At the end of the quarter, the company had cash and cash equivalents of $78.9 million. This October, H.C. Wainwright raised its price target on XOMA Corporation (NASDAQ:XOMA) to $69, with a Buy rating on the shares, highlighting the company’s plan to develop a drug for people with neovascular age-related macular degeneration.

As of Q2, 4 hedge funds tracked by Insider Monkey have positions in XOMA Corporation (NASDAQ:XOMA), down from 5 in the previous quarter. The total value of these stakes is $137.8 million.

In addition to AstraZeneca PLC (NASDAQ:AZN), AbbVie Inc. (NYSE:ABBV), Abbott Laboratories (NYSE:ABT), Johnson & Johnson (NYSE:JNJ), and Merck & Co. (NYSE:MRK), XOMA Corporation (NASDAQ:XOMA) is also one of the most popular biotech stocks.

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Disclosure. None. 10 Best Biotech Stocks to Buy According to Mark Lampert is originally published on Insider Monkey.