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WWH opens new positions in Takeda and Novartis  

Biotech overweight hurts Worldwide Healthcare

WWH opens new positions in Takeda and Novartis

Orbimed-managed Worldwide Healthcare Trust (WWH) has disclosed new substantial shareholdings in Takeda – the Japanese pharmaceuticals group that has just completed a takeover of Shire Pharmaceuticals – and Novartis, according to an analysis by Marten & Co. The shareholding in Takeda appears in third place and accounts for 5% if NAV, according to WWH’s latest factsheet, while the position in Novartis, a Swiss pharma giant, entered the trust’s top 10 in November and now ranks in sixth place. WWH also holds a substantial stake in Celgene (4.0% of NAV), which earlier this month agreed to a takeover by Bristol-Myers Squibb, whcih has boosted its share price by 25% since the start of the year.

The enlarged Takeda projects annual sales of $31bn this year, which would rank it eighth worldwide (ninth, after the Bristol-Myers Squibb and Celgene deal competes), based on prescription pharmaceutical sales. By contrast, Novartis is the world’s largest pharmaceutical group by prescription pharmaceutical sales, a position that is unlikely to change into the early 2020s, except by other mergers.

IN terms of performance in 2018, WWH saw its NAV fall by 4.2% in sterling terms, which was broadly matched by its share price, which declined 5%. Both reflected the significant fall in share prices for healthcare stocks in the second half of the year (which has in fact since partly reversed). The trust noted that in December, its NAV per share was down 11.8%, the share price was down 11.3%, and the MSCI World Health Care Index was down 8.0%. Pharmaceutical stocks were down 7.2% but biotech stocks fared much worse, down 11.1%, with small /mid-caps biotech names were down proportionally more at 2.0%. The only positive contributor of importance in December was Tesaro, it was acquired by GlaxoSmithKine (in a deal that has completed today).

WWH’s top ten positions , expressed as % of NAV, at the end of each month over the fourth quarter are shown in the table below.

Sep Oct Nov Dec
Merck & Co 4.3% 4.6% 4.9% 5.2%
Boston Scientific 4.4% 4.8% 4.9% 5.1%
Takeda 5.0%
Biogen 4.2% 4.5% 4.9% 4.9%
Celgene 3.4% 4.1% 4.1%
Novartis 3.4% 4.0%
Alexion Pharmaceuticals 5.0% 4.4% 3.4% 4.0%
Wright Medical 3.5% 3.8% 3.8% 3.4%
Novo Nordisk 2.9% 3.0% 3.2% 3.4%
Allergan 3.4% 3.2% 3.5% 3.3%
Vertex 3.2% 3.0% 3.2%
Cigna 2.9%
Edward lifesciences 2.7%
Mylan 2.5%

WWH: WWH opens new positions in Takeda and Novartis

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