Steven Cohen (Trades, Portfolio), manager of Point72 Asset Management, disclosed this week he took a position in Progenics Pharmaceuticals Inc. (PGNX, Financial), 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.
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.
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.
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.
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).
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, Financial), Zimmer Biomet Holdings Inc. (ZBH, Financial) and Celgene Corp. (CELG, Financial).
Disclosure: No positions.
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