Tekla Capital Management's Q3-Q4 2022 Holdings Comparison: Changes in the Pharma and Biotech Sector

Tekla Capital Management LLC's latest 13F holding comparison of the third and fourth quarter of 2022 highlights some significant changes in the biotech and pharmaceutical sectors. The report provides an overview of the performance of the companies in which the fund invested, highlighting some of the top performers and underperformers. In this blog post, we will analyze Tekla's investment strategy and explore the reasons behind these changes in holdings.

The comparison between Q3 and Q4 revealed that the fund reduced its holdings in Johnson & Johnson (JNJ) by 11.7%. At the same time, Tekla increased its investment in Amgen Inc. (AMGN) by 14.2%, and Gilead Sciences, Inc. (GILD) by 29.6%. These changes in holdings indicate that Tekla has a bullish outlook towards GILD and AMGN and reduced its investment in JNJ.

Tekla also increased its holdings in Eli Lilly and Company (LLY) by 35.9%, Regeneron Pharmaceuticals, Inc. (REGN) by 16.1%, and Biogen Inc. (BIIB) by 39.4%. This shift suggests that Tekla is optimistic about the prospects of LLY, REGN, and BIIB.

Another significant change in holdings was the increase in Pfizer Inc. (PFE) by 50.7%. Despite being a long-standing holding for Tekla, the fund upscaled its investment in PFE compared to the previous quarters. Conversely, Tekla reduced its investment in Bristol-Myers Squibb Company (BMY) by 20.9%.

The fund's holdings in Moderna Inc. (MRNA) increased by 27.8%. It is worth noting that this increase came before the news of MRNA's COVID-19 vaccine efficacy data. This suggests that Tekla saw the potential of MRNA's COVID-19 vaccine and believed that it would drive the company's revenue growth.

Tekla also increased its investment in Dexcom Inc. (DXCM) by 24.7% and Illumina, Inc. (ILMN) by 15%. The fund has a positive outlook for DXCM due to its position as a leader in continuous glucose monitoring, and for ILMN due to its dominance in genetic sequencing and its role in the medical response to the COVID-19 pandemic.

Tekla diversified its portfolio by investing in some new companies such as Rallybio Corporation (RLYB), an early-stage biotech company developing therapies for rare and severe diseases. The fund also reduced its investment in Cigna Corp. (CI) by 3.5% and Humana Inc. (HUM) by 27.4%.

In conclusion, Tekla's Q3-Q4 2022 holdings comparison provides an insight into the fund's investment strategy in the pharma and biotech sectors. While the fund reduced its investment in some of its long-standing holdings like JNJ and BMY, it increased its investment in other companies such as GILD, AMGN, and MRNA. Tekla's move to diversify its portfolio by investing in new companies like RLYB indicates its commitment to finding new opportunities and staying ahead of the market trends.