Buffett's Berkshire backs out of AbbVie, Bristol Myers Squibb holdings

After a gung-ho push into biopharma at the peak of the COVID-19 pandemic, Warren Buffett’s investment shop Berkshire Hathaway—more comfortable with tech stocks like Amazon and Apple—has hived off two major pharma holdings.

The outfit has exited a $410.7 million investment in AbbVie and severed its $324.4 million position in Bristol Myers Squibb, Forexlive reports. Last quarter, the company sold its Teva stake.

The latest move comes after Berkshire made a major splash in the healthcare arena in 2020, putting $5.66 billion in total investments behind pharma goliaths AbbVie, Bristol Myers Squibb, Merck & Co. and Pfizer.

Buffett’s interest in the quartet coincided with the industry’s uptick in popularity—and publicity—thanks to COVID-19. Still, many of Berkshire’s pharma stakes proved short-lived.

By the end of 2021’s second quarter, the VC firm had trimmed its holdings in AbbVie and Bristol Myers Squibb and nearly halved its position in Merck & Co. At the same time, the company also exited a $180 million stake in Biogen, which it started building out in 2019.

Berkshire’s brief Biogen run—which paralleled the Big Biotech’s plans to revive Alzheimer’s disease prospect aducanumab through the med’s controversial approval last summer—seemed to contradict Buffett’s investment philosophy. The billionaire is well known for saying, “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”

While it’s easier to guess why Berkshire may have pulled the plug on Biogen, it remains unclear why Pfizer—still cruising on pandemic sales momentum in 2022—dropped off Berkshire’s investment list just one quarter after its addition.