U.S. Markets closed

Steven Cohen Storms Into Progenics Pharmaceuticals

- By James Li

Steven Cohen (Trades, Portfolio), manager of Point72 Asset Management, disclosed this week he took a position in Progenics Pharmaceuticals Inc. (PGNX), increasing his portfolio's exposure to the health care sector.


Cohen purchased a 4.7 million-share stake for $4.20 per share, giving it a weight of 0.08% in his equity portfolio.

26bc6b60-0fa4-11e9-9f70-a59a1e60456c.png

Company background

New York-based Progenics develops innovative medicines and technologies to target and treat cancer. The company's pipeline products include Azedra, which treats malignant or recurring cancers like pheochromocytoma and paraganglioma, and PyL, which treats prostate cancer.

GuruFocus ranks Progenics' financial strength a modest 5 out of 10: although the company has approximately $3 in cash for every $1 in debt, its Altman Z-score of -1.69 suggests possible financial distress.

1546534641980.png

Progenics said in a Nov. 8 earnings report that cash and cash equivalents as of September 2018 were $148.9 million, up $58.2 million compared to cash and cash equivalents as of December 2017.

1629675638.png

Latest earnings performance summary and risks

Although the company reported higher revenues and lower research and development costs during third-quarter 2018 compared to third-quarter 2017, Progenics still reported net losses of $24.4 million, or 30 cents per diluted share, for third-quarter 2018, compared to net losses of $15.4 million, or 24 cents per diluted share, in the prior-year quarter.

10998082.png

Progenics highlighted several risks related to its business, which include the highly-competitive biotech industry, the risk of failure during each stage of the drug development process and the overall uncertainty of the business due to high research and development costs.

See also

Other gurus betting on Progenics include Chuck Royce (Trades, Portfolio), our keynote speaker at the 2019 Value Conference, and Ken Fisher (Trades, Portfolio).

9314823eb0343f7db42ab849d69684db.png

Cohen's portfolio has an approximately 16.65% weight in the health care sector, second only to the consumer cyclical sector. The guru's other top health care holdings include Novartis AG (NVS), Zimmer Biomet Holdings Inc. (ZBH) and Celgene Corp. (CELG).

Disclosure: No positions.

Read more here:

  • Steven Cohen Takes an Interest in Inogen
  • Steven Cohen's Top 5 Buys in 3rd Quarter
  • Bristol-Myers Squibb Rings in the New Year by Buying Celgene for $74 Billion


This article first appeared on GuruFocus.