Analysts see potential: Jim Simons: These are the stocks that Renaissance Technologies strikes | message
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Renaissance Technologies has been very successful in past decades
Even stock market legends like Warren Buffett can’t compete with Medallion funds
Simons works with companies in the health sector
Jim Simons founded the investment company Renaissance Technologies in 1978. Between 1988 and 2018, the hedge fund made trading profits of more than $ 100 billion. With the flagship fund Medallion, Simons surpassed the returns of star investors such as Buffett, Soros or Dalio – from 1988 to 2018 he achieved an average annual return of 66 percent. Now the fund recently bought two stocks – time to take a closer look at them.
Orchard Therapeutics (ORTX) is a rare disease treatment company. For these, ORTX uses a development approach that includes autologous ex vivo gene therapy. The aim is to harness the power of genetically engineered blood stem cells to “remedy the underlying cause of the disease in a single administration,” explains Orchard Therapeutics on its website.
The company is currently preparing to commercialize its leading lentiviral gene therapy Libmeldy for metachromatic leukodystrophy (MLD) in Europe. A decision by the European Medicines Agency (EMA) is expected this year, so that the market launch could already take place in the first half of 2021.
Orchard Therapeutics plans to open six locations in Germany, France, Italy, the UK and the Netherlands to market its products. “ORTX identifies the marketing strategy to increase disease awareness and initiate diagnostic and birth screenings, including free testing. We anticipate this commercial strategy may be applicable to the other programs in the coming years,” said Yahoo Finance’s Kevin DeGeeter of Oppenheimer again.
Simons seems bullish for Orchard Therapeutics: In the second quarter, Renaissance bought 373,200 shares of the company from the healthcare industry, increasing its stake by 145 percent, according to the latest 13-F form filed with the SEC. Overall, the position now amounts to 630,400 shares valued at $ 3.78 million.
And analysts also see potential in the company. DeGeeter recommends buying Orchard Therapeutics shares with a price target of $ 26. In doing so, he rates the stocks as having an upside potential of almost 365 percent – most recently the stocks were listed on the NASDAQ at 5.60 US dollars (as of the closing price on September 1). The analysts seem to agree: In the past three months there have been no “holds” or “sells”, only buy recommendations and the average price target of 16 US dollars is still around 185 percent above the current price level.
The second company that Simons relies on also comes from the health sector. Kadmon Holdings (KDMN) describes itself as a biopharmaceutical company “that discovers, develops and delivers transformative therapies for unmet medical needs”. The company works on treatment options for immune and fibrotic diseases and develops immuno-oncological therapies. KDMN is also facing an important approval application, which is why some Wall Street experts strike at Kadmon shares.
As Kadmon stated in a press release in May, the company continues to expect to complete NDA filing for belumosudil in patients with chronic graft-versus-host disease in the fourth quarter of 2020. As indicated in the announcement, the FDA has also accepted Belumosudil as part of the Real-Time Oncology Review (RTOR) program, which aims to simplify communication between developers and the FDA and to provide feedback prior to final submission. “Based on its clinical profile and breakthrough therapy designation, we believe Belumosudil has an excellent chance (85% probability of success) of gaining US approval,” Yahoo Finance quoted Mark Breidenbach from Oppenheimer as saying.
Obtaining approval from the EMA, on the other hand, could be more difficult: “… we do not believe that ROCKstar is sufficient to obtain conventional regulatory approval. However, Kadmon plans to influence the EMA with 12-month results and consistent historical control data – which could potentially open a conditional approval pathway backed by a randomized controlled trial. We believe that a controlled trial could also help drive belumosudil uptake in the US, “said Breidenbach.
Renaissance also struck Kadmon in the second quarter, purchasing 1,199,100 shares valued at $ 6.14 million.
Mark Breidenbach calls for a price target of 8 US dollars for the Kadmon share and thus attaches an upside potential of around 75 percent – the paper was most recently quoted at 4.58 US dollars (as of: closing price on September 1). And the analysts also agree on Kadmon shares: only buy ratings in the past three months. The average target price is here even at 16.50 US dollars, which would mean an increase of around 260 percent.
Finanzen.net editorial team
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