Hedge Fund Manager in Sweden Reveals His Best Pharma Bets

(Bloomberg) -- The founding partner at a Swedish hedge fund that’s delivered more than 700% over the past decade is a big fan of Roche Holding AG and thinks there’ll be about 10 Covid-19 vaccines in a year’s time.

Henrik Rhenman oversees $814 million at Rhenman Healthcare Equity L/S. His euro-denominated portfolio has made a total of 718% since he launched his fund in 2009. Over the same period, krona investments delivered 550%.

“The pharma companies that produce medicines that people need all the time, chronic treatments, will have stable earnings,” Rhenman said by phone. But he’s steering clear of firms looking into Covid-19 vaccines.

“We don’t hold them. There’s too much uncertainty,” Rhenman said. “It’s a bit like a lottery ticket. I think there will be 10 vaccines within one year.”

Here’s a list of the companies he holds:

Roche Holding AG: “The most productive R&D engine of all large cap pharmas, at a decent P/E-ratio. Earnings will accelerate from here.”

Horizon Therapeutics Plc: “Two blockbusters in the making with 50% earnings growth. A must-own for us.”

Vertex Pharmaceuticals Inc.: “A long runway for their cystic fibrosis franchise to expand with 25% earnings growth for many years to come. Pipeline is developing and getting more attention.”

AbbVie Inc.: “A classic value case with a 5% secure dividend. Very disciplined and successful in preparing for Humira patent loss starting 2023.”

UnitedHealth Group Inc.: “The other side, trying to use health-care dollars more efficiently. As treatment options continue to expand, United is best placed at managing disease.”

MacroGenics Inc.: “Good illustration that small biotech companies can suddenly go from frog to prince with new clinical data. This prince will be a king.”

Gilead Sciences Inc.: “Also good value. Forget Remdesivir. It’s still a good company with a low valuation. New management will take the company to a new growth phase.”

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