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10 Best Biotech Stocks to Buy According to Joseph Edelman’s Perceptive Advisors

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·10 min read
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In this article, we will discuss the 10 best biotech stocks to buy according to Joseph Edelman’s Perceptive Advisors. If you want to skip our detailed analysis of Edelman’s history, investment philosophy, and hedge fund performance, go directly to the 5 Best Biotech Stocks to Buy According to Joseph Edelman’s Perceptive Advisors.

Joseph Edelman, the billionaire hedge fund manager, founded Perceptive Advisors in 1999. Edelman completed his Master's in Business Administration from New York University to hone his business and financial talents after graduating from the University of California. As of the second quarter of 2021, Edelman manages more than $15 billion in securities at his hedge fund and has a personal net worth of $2.9 billion. He ranks 389th on the list of the wealthiest Americans in 2021, issued by the news publication Forbes. Edelman was also the 11th highest-earning hedge fund manager in 2018.

Joseph Edelman is considered a ‘rock star’ within the narrow area of biotechnology investing. His devotion to the biotech field has led him to employ a number of doctors, PhDs, and individuals trained in biological sciences. Edelman credited his training in psychology for the hedge fund’s success because, for him, investment in biotech stocks is heavily dependent on analyzing the market participants’ biases. This ideology influenced his hedge fund's name - Perceptive Advisors.

Edelman’s Perceptive Advisors primarily invests in small and mid-cap biotech stocks using investing analytic expertise. Perceptive Advisors has performed well over the years. In 1999 and 2000, Perceptive Advisors generated returns of 129% and 155%, respectively. The hedge fund posted positive returns throughout the first five years of its existence, from 1999 to 2003, with the exception of the 10% loss in 2002. More recently, Edelman faced a nearly 20% loss in 2021, prior to which his fund generated returns of 52% in 2019 and 29% in 2020.

Some of Edelman’s popular stock picks as of the second quarter of 2021 include United Therapeutics Corporation (NASDAQ: UTHR), Medtronic plc (NYSE: MDT), and Quotient Limited (NASDAQ: QTNT).

Based on the latest 13F holdings for the second quarter of 2021, Perceptive Advisors owns 616,802 shares in United Therapeutics Corporation (NASDAQ: UTHR) worth $110.6 million. United Therapeutics Corporation (NASDAQ: UTHR) is a biotechnology company engaged in the production of novel treatments for various life-threatening diseases.

In Medtronic plc (NYSE: MDT), Joseph Edelman owns 450,000 shares worth $55.8 million, representing 0.72% of the portfolio. Medtronic plc (NYSE: MDT) is a Minneapolis-based medical device company founded in 1949.

Quotient Limited (NASDAQ: QTNT) is another popular stock in Edelman’s portfolio. The Switzerland-based company focuses on transfusion diagnostics. Perceptive Advisors owns close to 16.1 million shares in Quotient Limited (NASDAQ: QTNT) worth $58.9 million.

10 Best Biotech Stocks to Buy According to Joseph Edelman’s Perceptive Advisors
10 Best Biotech Stocks to Buy According to Joseph Edelman’s Perceptive Advisors

Our Methodology

For this article, we picked the top 10 biotech stocks from the second quarter portfolio of Joseph Edelman's Perceptive Advisors.

Why should we pay attention to Perceptive Advisors' stock picks? 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 more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 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 Joseph Edelman’s Perceptive Advisors

10. Landos Biopharma, Inc. (NASDAQ:LABP)

Edelman’s Stake Value: $171,747,000

Percentage of Joseph Edelman’s 13F Portfolio: 2.22%

Number of Hedge Fund Holders: 5

Landos Biopharma, Inc. (NASDAQ: LABP) is ranked tenth on our list of the 10 best biotech stocks to buy according to Joseph Edelman’s Perceptive Advisors. The Virginia-based company is involved in the discovery and production of oral therapeutics for autoimmune diseases. Out of the hedge funds being tracked by Insider Monkey, Perceptive Advisors is the leading investor in Landos Biopharma, Inc. (NASDAQ: LABP) with around 14.87 million shares worth over $171.7 million.

For the second quarter of 2021, Landos Biopharma, Inc. (NASDAQ: LABP) recorded an EPS of $0.12, beating the analysts’ estimate by $0.26. On September 20, the company also announced a research collaboration with the Icahn School of Medicine to further its study on a drug used in the treatment of Crohn’s disease.

On September 23, financial brokerage firm JonesTrading initiated coverage of Landos Biopharma, Inc. (NASDAQ: LABP) with a Buy rating and a price target of $39, noting the updates on trial phases of different drugs produced by the company. Prakhar Agrawal, an analyst at the firm, issued the ratings.

The company saw a decrease in hedge fund sentiment recently. As of the second quarter of 2021, 5 hedge funds out of the 873 funds tracked by Insider Monkey held stakes in Landos Biopharma, Inc. (NASDAQ: LABP), down from 11 in the preceding quarter.

In addition to Landos Biopharma, Inc. (NASDAQ: LABP), United Therapeutics Corporation (NASDAQ: UTHR), Medtronic plc (NYSE: MDT), and Quotient Limited (NASDAQ: QTNT) are some of Edelman’s popular stock picks as of the second quarter of 2021.

9. VBI Vaccines Inc. (NASDAQ:VBIV)

Edelman’s Stake Value: $184,392,000

Percentage of Joseph Edelman’s 13F Portfolio: 2.39%

Number of Hedge Fund Holders: 10

VBI Vaccines Inc. (NASDAQ: VBIV) is a Massachusetts-based company engaged in the development of treatments for infectious diseases and cancer. Founded in 1965, the company is ranked ninth on our list of the 10 best biotech stocks to buy according to Joseph Edelman’s Perceptive Advisors.

Latest data reveals that Joseph Edelman’s Perceptive Advisors is the leading investor in VBI Vaccines Inc. (NASDAQ: VBIV) as of the second quarter of 2021, with 55 million shares worth over $184 million.

As of the second quarter of 2021, 10 hedge funds out of the 873 funds tracked by Insider Monkey held stakes in VBI Vaccines Inc. (NASDAQ: VBIV), up from 7 in the preceding quarter. The total value of these stakes is over $194.6 million.

Apart from VBI Vaccines Inc. (NASDAQ: VBIV), United Therapeutics Corporation (NASDAQ: UTHR), Medtronic plc (NYSE: MDT), and Quotient Limited (NASDAQ: QTNT) are some of Edelman’s popular stock picks as of the second quarter of 2021.

8. Horizon Therapeutics Public Limited Company (NASDAQ:HZNP)

Edelman’s Stake Value: $185,875,000

Percentage of Joseph Edelman’s 13F Portfolio: 2.41%

Number of Hedge Fund Holders: 56

Horizon Therapeutics (NASDAQ: HZNP) is a biotechnology company producing treatments for severe inflammatory and autoimmune diseases. The company is ranked eighth on our list of the 10 best biotech stocks to buy according to Joseph Edelman’s Perceptive Advisors.

As per the latest 13F filings, Perceptive Advisors owned 1.98 million shares in the company at the end of the second quarter of 2021, worth over $185.8 million. Investment firm VenBio Select Advisor is the leading investor in Horizon Therapeutics Public Limited Company (NASDAQ: HZNP) with a stake worth $842.7 million.

On October 6, Jefferies gave a Buy rating on Horizon Therapeutics Public Limited Company (NASDAQ: HZNP) stock with a price target of $132. Akash Tewari, an analyst at the investment advisory, assumed the rating coverage.

As of the second quarter of 2021, 56 hedge funds out of the 873 funds tracked by Insider Monkey held stakes in Horizon Therapeutics Public Limited Company (NASDAQ: HZNP), up from 48 in the preceding quarter.

Investment management firm Carillon Tower Advisers mentioned Horizon Therapeutics Public Limited Company (NASDAQ: HZNP) in its Q1 2021 investor letter. Here’s what the firm said:

"Horizon Therapeutics is a biopharmaceutical company whose primary focus is research, development, and marketing of late-stage pharmaceutical products. After experiencing some unfortunate manufacturing hiccups in the later stages of 2020 for its key product Tepezza, which is used in the treatment of thyroid eye disease, the company recently received positive news that should relieve their supply issues going forward. With manufacturing of Tepezza back online after being forced to halt due to Operation Warp Speed’s COVID-19 vaccine production orders, Horizon expects patient treatments to resume in mid-April."

Just like Horizon Therapeutics Public Limited Company (NASDAQ: HZNP), United Therapeutics Corporation (NASDAQ: UTHR), Medtronic plc (NYSE: MDT), and Quotient Limited (NASDAQ: QTNT) are some of Edelman’s popular stock picks as of the second quarter of 2021.

7. Collegium Pharmaceutical, Inc. (NASDAQ:COLL)

Edelman’s Stake Value: $189,723,000

Percentage of Joseph Edelman’s 13F Portfolio: 2.46%

Number of Hedge Fund Holders: 16

Collegium Pharmaceutical, Inc. (NASDAQ: COLL) specializes in the production of treatments for chronic pain. The company is ranked seventh on our list of the 10 best biotech stocks to buy according to Joseph Edelman’s Perceptive Advisors. As of the second quarter of 2021, Perceptive Advisors is the leading investor in Collegium Pharmaceutical, Inc. (NASDAQ: COLL) with 17.5 million shares, worth more than $189.7 million. In August, investment advisory Cantor Fitzgerald downgraded Collegium Pharmaceutical, Inc. (NASDAQ: COLL) from Overweight to Neutral with a $22 price target, post the second-quarter results. As of the second quarter of 2021, 16 hedge funds out of the 873 funds tracked by Insider Monkey held stakes in Collegium Pharmaceutical, Inc. (NASDAQ: COLL), up from 15 in the preceding quarter. The total value of these stakes is over $209.7 million.

Besides Collegium Pharmaceutical, Inc. (NASDAQ: COLL), United Therapeutics Corporation (NASDAQ: UTHR), Medtronic plc (NYSE: MDT), and Quotient Limited (NASDAQ: QTNT) are some of Edelman’s popular stock picks as of the second quarter of 2021.

6. Amicus Therapeutics, Inc. (NASDAQ:FOLD)

Edelman’s Stake Value: $222,890,000

Percentage of Joseph Edelman’s 13F Portfolio: 2.89%

Number of Hedge Fund Holders: 34

Amicus Therapeutics, Inc. (NASDAQ: FOLD) focuses on the invention of medical therapies for rare metabolic diseases. Founded in 2002, the company is ranked sixth on our list of the 10 best biotech stocks to buy according to Joseph Edelman’s Perceptive Advisors.

The latest 13F filings reveal that Perceptive Advisors is the leading investor in Amicus Therapeutics, Inc. (NASDAQ: FOLD) as of the second quarter of 2021 with 23.1 million shares worth over $222.8 million.

On September 30, JPMorgan upgraded Amicus Therapeutics, Inc. (NASDAQ: FOLD) from Neutral to Overweight with a price target of $16, noting the $600M sales of two treatments developed by Amicus.

As of the second quarter of 2021, 34 hedge funds out of the 873 funds tracked by Insider Monkey held stakes in Amicus Therapeutics, Inc. (NASDAQ: FOLD), up from 30 in the preceding quarter. The total value of these stakes is over $832 million.

In its Q1 2021 investment letter, investment management firm Carillon Tower Advisers mentioned Amicus Therapeutics, Inc. (NASDAQ: FOLD). Here’s what it had to say:

"Amicus Therapeutics is a biotechnology company focused on discovering, developing, and delivering novel high-quality medicines for people living with rare metabolic diseases. The firm’s shares slumped after it reported disappointing results in the phase three trial for its drug to be used in the treatment of late-onset Pompe disease (LOPD). Unfortunately, the trial data did not generate statistical significance in the primary endpoint."

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Disclosure: None. 10 Best Biotech Stocks to Buy According to Joseph Edelman’s Perceptive Advisors is originally published on Insider Monkey.