Shares of big pharma buzzed on Tuesday after Warren Buffett's Berkshire Hathaway (BRK.A) - Get Report disclosed investments in the likes of AbbVie (ABBV) - Get Report, Bristol-Myers Squibb (BMY) - Get Report, Merck (MRK) - Get Report and Pfizer (PFE) - Get Report - companies that are all working on a Covid-19 vaccine and related therapies.
In a regulatory filing with the Securities and Exchange Commission, Berkshire Hathaway disclosed that it took new stakes in Merck and Pfizer during the third quarter, while also adding bets on AbbVie and Bristol-Myers.
Berkshire had stakes valued at more than $1.8 billion each in AbbVie, Bristol-Myers Squibb and Merck at the end of the quarter, and about $136 million in Pfizer, according to the filing.
Berkshire made the big-pharma additions months ahead of disclosures from Pfizer and BioNTech (BNTX) - Get Report that their vaccine candidate shows promising results at protecting people against Covid-19. Merck has also been pushing ahead with therapies for the virus.
The bets give Berkshire more exposure to pharmaceutical companies as officials prepare to ramp up efforts to distribute a Covid vaccine when approved.
The filing and disclosures helped push shares of pharmaceutical companies higher on Tuesday. Shares of AbbVie were up 1.06% at $99.40, while shares of Merck were up 1.32% at $81.24. Bristol-Myers Squibb gave up early gains and was down 0.81% at $63.97, while Pfizer also reversed course, trading down 3.15% at $36.18.
Berkshire's bets on big pharma came at the expense of ongoing cuts to its stakes in banks, including Wells Fargo (WFC) - Get Report and JPMorgan Chase (JPM) - Get Report, according to the filing. Berkshire owned about 127 million shares of Wells Fargo at the end of September, a marked shift for an investment that once ranked as Berkshire’s biggest.
Berkshire's Class B shares were down 1.24% at $230.28 in trading on Tuesday.