Buffett's Berkshire cuts U.S. drugmaker stakes, invests in drug royalty
company
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[November 16, 2021] By
Jonathan Stempel
(Reuters) -Warren Buffett's Berkshire
Hathaway Inc said on Monday it eliminated its investment in Merck & Co
and reduced its stakes in AbbVie Inc and Bristol-Myers Squibb Co, as it
pared its overall stock market investments.
Berkshire also eliminated its small stakes in Organon & Co, a Merck
spinoff specializing in contraception and other women's health products,
and telecommunications company Liberty Global Plc.
It disclosed new investments of $475 million in Royalty Pharma Plc,
which buys drug royalties, and $99 million in flooring retailer Floor &
Decor Holdings Inc.
The changes were disclosed in a regulatory filing detailing Berkshire's
U.S.-listed holdings as of Sept. 30.
Shares of Royalty Pharma rose more than 5% after the market close, a
common occurrence after Berkshire reveals new stakes. Royalty Pharma did
not immediately respond to requests for comment.
Investors monitor Berkshire's investments closely to see where Buffett
and his investment managers Todd Combs and Ted Weschler see value. The
filings do not say who bought and sold what, though Buffett generally
handles larger investments.
While Berkshire ended September with $310.7 billion of equity holdings,
it sold $2 billion more stocks than it bought in the third quarter, and
has been a net seller for all of 2021.
About 41% of Berkshire's stock investments are in Apple, with another
29% in Bank of America Corp, American Express Co and Coca-Cola Co.
[to top of second column] |
Berkshire Hathaway Chairman Warren Buffett walks through the exhibit
hall as shareholders gather to hear from the billionaire investor at
Berkshire Hathaway Inc's annual shareholder meeting in Omaha,
Nebraska, U.S., May 4, 2019. REUTERS/Scott Morgan
The sales and Buffett's nearly six-year drought in buying large whole companies
have contributed to Berkshire's boosting its cash holdings to a record
https://www.reuters.com/article/
berkshire-results-idCAKBN2HR092 $149.2 billion, despite at least $21.9 billion
of stock buybacks this year.
They have also disappointed investors who have seen Berkshire's stock price
significantly lag the Standard & Poor's 500 since the end of 2018.
Berkshire's respective share stakes in AbbVie and Bristol-Myers fell 30% and 16%
in the quarter.
Royalty Pharma helps fund late-stage clinical trials and product launches in
exchange for future royalty streams, and sometimes buys royalties from drug
developers.
Its larger revenue streams come from Vertex Pharmaceuticals Inc treatments for
cystic fibrosis, Biogen Inc's Tysabri for multiple sclerosis, and AbbVie's
Imbruvica for various cancers.
The company's share price has recently traded about 50% above its initial public
offering price in June 2020, but below where it closed on its first trading day.
Berkshire is based in Omaha, Nebraska. It also owns dozens of businesses
including the BNSF railroad, Geico auto insurance and Dairy Queen ice cream.
(Reporting by Jonathan Stempel in New York;Editing by Chris Reese and Stephen
Coates)
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