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Investors Business Daily
Investors Business Daily

What To Know About The Latest Warren Buffet Biotech Stock Bet, Royalty Pharma

Warren Buffet-led Berkshire Hathaway added more than 13 million shares of Royalty Pharma, leading RPRX stock to inch higher on Tuesday.

Royalty Pharma is a partnership machine. It partners with companies to fund late-stage studies and new product launches in exchange for future royalties. The biotech company also acquires existing royalties from the original companies. Royalty counts AbbVie, Johnson & Johnson, Biogen and others among its partners.

And, now, Berkshire Hathaway has a 2.2% stake in RPRX stock.

On today's stock market, RPRX stock rose 0.7% to 41.99. The move helped shares bound well above their 200-day line, according to Shares also touched their highest point since June.

RPRX Stock Pops On Berkshire Add

In addition to buying 13.15 million shares of Royalty Pharma stock, Berkshire Hathaway sold shares of other drugmakers, including AbbVie and Bristol Myers Squibb. It completely exited its positions in Merck and Organon.

The health care sector has been a minefield for investors amid spikes and pitfalls in the pandemic.

Royalty Pharma showed strong growth in the third quarter. According to FactSet, sales and income beat the forecasts of RPRX stock analysts. Revenue grew more than 24% to $587 million. Adjusted profit surged 52% to 73 cents per share.

For the year, Royalty Pharma says it has inked transactions worth up to $2.8 billion, including $2.1 billion in upfront payments.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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