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Billionaires' Best Healthcare Stock Picks of 2017 (So Far)

By Keith Speights - Mar 21, 2017 at 3:02PM

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Why billionaire investors are loving Immunomedics, Achaogen, AveXis, Exact Sciences, and Clovis Oncology this year.

Billionaire investors didn't amass their fortunes by picking horrible stocks. While you wouldn't want to blindly copy these successful investors, it certainly doesn't hurt to watch which stocks they choose and how those stocks perform.

I looked at the portfolios of several of the wealthiest investors in the country to see how their healthcare stock picks are faring in 2017. The billionaires' best healthcare stocks so far this year include Immunomedics (IMMU), Achaogen (NASDAQ: AKAO), AveXis (NASDAQ: AVXS), Exact Sciences (EXAS 4.89%), and Clovis Oncology (CLVS -11.75%). Here's why these healthcare stocks favored by the super-rich are performing so well.

A pile of banded hundred-dollar bills.

Image source: Getty Images.

Immunomedics: A drama unfolding

Steven Cohen's Point72 Asset Management fund owns shares of Immunomedics. Shares of the clinical-stage biopharmaceutical company have soared more than 70% since the beginning of 2017. 

There have been two primary factors driving Immunomedics stock recently. Immunomedics licensed IMMU-132 to Seattle Genetics (SGEN -2.33%). The agreement also allows Seattle Genetics to buy a 9.9% stake in Immunomedics. 

However, the other factor involves activist investor group venBio Select Advisor, LLC, which filed a lawsuit to block the Seattle Genetics deal and has made a play to get four slots on the company's board of directors. The continuing drama has Immunomedics investors contemplating an even more lucrative agreement with Seattle Genetics or perhaps a sale of the company. 

Achaogen: Pleased with plazomicin

Achaogen is a healthcare favorite of three billionaire investors -- Steven Cohen, Paul Tudor Jones, and James Simons. The biotech's stock price has shot up more than 60% year to date and at one point more than doubled.

Investors are still celebrating Achaogen's great late-stage clinical study results for plazomicin. In December, the company announced that primary endpoints were met in two phase 3 studies of the antibiotic. 

Achaogen expects to file for regulatory approval to the U.S. Food and Drug Administration in the second half of 2017. Analysts project that plazomicin could reach peak annual sales of $340 million if approved.

Exact Sciences: Cheers for Cologuard

Cohen's Point72 Asset Management also owns another big winner so far this year -- Exact Sciences. The molecular diagnostics company's stock is up nearly 60% year to date.

The big story for Exact Sciences has been wider acceptance for its Cologuard DNA test for colorectal cancer. In January, the Blue Cross Blue Shield Association released a positive review for Cologuard. That's great news, since the association represents 36 Blue Cross and Blue Shield plans that together cover one out of three Americans. 

Exact Sciences' fourth-quarter and full-year 2016 results announced in February added to investors' excitement. The company reported revenue growth in 2016 of 152%, with Cologuard test volume up 35%. 

AveXis: Attracting attention

Cohen scored yet again with AveXis. The clinical-stage biotech's stock has jumped nearly 70% so far this year.

AveXis recently announced positive top-line results from its phase 1 study of AVXS-101 in treating spinal muscular atrophy (SMA) type 1. AVXS-101 is the first gene therapy to be studied for the indication.

Biogen (BIIB 0.15%) won approval for its SMA drug, Spinraza, in December. The big biotech has admitted that it's keeping a close watch on its smaller potential rival. The success for AVXS-101 is no doubt fueling speculation that Biogen might have an acquisition of AveXis in mind down the road. 

Clovis Oncology: Roaring with Rubraca

James Simons' Renaissance Technologies has a stake in Clovis Oncology. That investment has done well in 2017, with shares of the biotech up nearly 60%.

Clovis' ovarian cancer drug Rubraca got off to a good start after winning FDA approval in December. The biotech expects an approval recommendation in Europe in the fourth quarter of this year. 

Good news for AstraZeneca (AZN -1.67%) also translated to a nice bump for Clovis. AstraZeneca reported positive late-stage results for its ovarian cancer drug, Lynparza, in March. Investors appeared to be anticipating that Clovis could get positive results from additional studies of Rubraca based on AstraZeneca's results.  

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Stocks Mentioned

Seagen Inc. Stock Quote
Seagen Inc.
$175.92 (-2.33%) $-4.19
AstraZeneca PLC Stock Quote
AstraZeneca PLC
$64.85 (-1.67%) $-1.10
Biogen Inc. Stock Quote
Biogen Inc.
$210.94 (0.15%) $0.31
Clovis Oncology, Inc. Stock Quote
Clovis Oncology, Inc.
$2.52 (-11.75%) $0.34
Immunomedics, Inc. Stock Quote
Immunomedics, Inc.
Exact Sciences Corporation Stock Quote
Exact Sciences Corporation
$43.14 (4.89%) $2.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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