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Delivering Alpha

Hedge fund manager and Icahn protege is bullish on three drug stocks including Biogen

Key Points
  • Sarissa Capital Management chief investment officer Alex Denner highlighted Biogen as one of his top stock picks Wednesday.
  • He also named Ironwood Pharmaceuticals and The Medicines Company as two compelling investments. 
Alexander J. Denner, Founding Partner and CIO, Sarissa Capital Management 
David A. Grogan | CNBC

Sarissa Capital Management chief investment officer Alex Denner highlighted Biogen as one of his top stock picks at the Delivering Alpha Conference in New York on Wednesday.

The investor underscored an "exciting" drug pipeline as a compelling factor in his investment.

"Biogen has a very exciting pipeline. There are a number of interesting components in the pipeline. The one thing that people focus on most is a particular Alzheimer’s drug called Aducanumab that could be a really big drug, he said. "It’s not clear that the drug will get approved at this point: it’s in relatively early stages — well it’s in late-stage testing — but the data that have been presented have been better than any other Alzheimer’s drug that’s ever passed."

He also mentioned Biogen's therapy for a rare genetic disease called spinal muscular atrophy.

"A product Biogen just launched is a drug called Spinraza, which is a wonderful therapy for a horrible disease, mostly in children," Denner, who sits on Biogen's board of directors, explained. "This drug is really having a remarkable effect; it’s a wonderful thing for patients."

He also highlighted Ironwood Pharmaceuticals and The Medicines Company as other possible bets in the space.

"[Ironwood] is company we have a position in, it’s a very interesting company: they basically sell constipation drugs and a few other things but they have a marketing relationship with Allergan," Denner said. "It does not make sense for this company to be in the market selling drugs to patients on their own."

"They should be — and we’ve been talking with the company and they’re taking some steps do that — they should be looking to unlock that value play, allocating their capital more appropriately," he said

Biogen is Sarissa's Alex Denner's best idea at Delivering Alpha

Like other shareholder activists, Denner's approach focuses on improving the strategies of companies to unlock otherwise trapped equity value. Having previously served as a managing director at Icahn Capital — an entity through which famed activist Carl Icahn conducts his investment activities — Denner's current investments include a number of large biotechnology and pharmaceutical companies.

Sarissa oversees $535 million in assets under management according to its latest Form ADV filing.