Andreas Halvorsen (Trades, Portfolio), portfolio manager of Viking Global Investors L.P., disclosed this week a 38,341,357-share stake in Myovant Sciences Ltd. (MYOV, Financial) for $16.41 per share, further expanding his exposure to the biotechnology industry.
The former protégé of Tiger Management founder Julian Robertson (Trades, Portfolio) manages approximately $26 billion in assets for his clients, with approximately $18 billion in equities. According to the fund’s website, Viking Global seeks long-term capital appreciation through a research-intensive, long-term-focused investment approach.
Viking Global’s equity portfolio contains approximately 20.13% weight in health care stocks, second only to the 26.25% weight in the consumer cyclical sector.
Company and industry background
Myovant Sciences, a clinical-stage biopharmaceutical company formed in February 2016, develops and commercializes innovative therapies for men’s and women’s health, including the treatment of advanced prostate cancer in men and endocrine diseases in women. The company’s product candidate is relugolix, an oral, once-daily supplement for the treatment of heavy menstrual bleeding associated with uterine fibroids and endometriosis.
GuruFocus ranks Myovant’s profitability 3 out of 10 as returns on equity underperform over 89% of global competitors. The company highlighted several risks and uncertainties in its June 2018 annual report, including its limited operating history and significant net losses stemming from high research and development costs, common risks that fledging biotech companies face. For the quarter ending Sept. 30, Myovant reported research and development expenses of $53.8 million, up approximately $29.6 million from third-quarter 2017. The sharp increase in expenses reflects ongoing clinical trials for relugolix and Myovant’s other key product, MVT-602.
Net losses for the quarter also reflect Myovant’s increased selling, general and administrative expenses, as well as interest expenses related to financing agreements with NovaQuest Pharma Opportunities Fund IV L.P. and Hercules Capital Inc.
Guru continues investing in biotech
According to GuruFocus real-time picks, a Premium feature, Halvorsen has invested in several other biotech companies since October, including aTyr Pharma Inc. (LIFE, Financial), Urovant Sciences Ltd. (UROV, Financial), Moderna Inc. (MRNA, Financial) and Axovant Sciences Ltd. (AXON, Financial).
Disclosure: No positions.
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