This is Porter & Co. Biotechnology – where Porter Stansberry presents a revamped portfolio to capitalize on the next biotech bull market. The details of the recommendations – and the specific name of the companies and buy prices – are for paid-up subscribers only. To learn more about subscribing to Porter & Co. Biotechnology, click here.
To Make Generational Wealth In Biotech, Follow The Bakers
In the first weeks of 2024, Pfizer (PFE) closed its $43 billion purchase of the cancer-drug maker Seagen.
That deal sent an enormous $10 billion payday to one investment fund – Baker Brothers Advisors. This wasn’t a lucky break or overnight success. The fund began investing in Seagen in 2003 – then Seattle Genetics – when it had no approved products and was burning cash. Over the next 20 years, the fund would invest almost $1.5 billion into the company.
Who are the Baker brothers? Who are these investors who take massive, nearly-permanent, positions in some of the riskiest companies in the world?
Julian and Felix Baker grew up in Hyde Park, Illinois, on Chicago's South Side, the sons of two professors. Julian went to Harvard and then made private-equity investments at Credit Suisse First Boston. Felix went to Stanford, completed two years of medical school, and then earned a PhD in immunology.
In 1994, the brothers began managing biotech investments for the Tisch family, the owners of the giant conglomerate Loews (NYSE: L). They opened their own firm in 2000 and ran it for years out of the Loews building at 667 Madison Avenue in New York City, which is why their flagship fund is still called 667, LP. By 2006, they managed about $1 billion. Today, the firm reports $20 billion of assets, invested across 84 positions.
Like many of the world’s best investors, the Bakers try to remain completely out of sight. The firm has no website. The brothers do not give interviews. What they do doesn’t require fame. It requires intense conviction. While most investors believe in managing the risks of drug development by using extreme amounts of diversification, the Baker brothers do the opposite. They make enormous, concentrated, extremely long-term investments into developing biotech companies.
Today, the 10 largest positions of Baker Brothers Advisors make up 73.2% of the portfolio. Its biggest holding, Incyte (INCY), is 17.5% of the fund.
The success of Seagen demonstrates the brothers’ hands-on, long-term focus. They didn’t just buy Seattle Genetics shares early on. Felix became lead director of Seattle Genetics in 2005 and remained on the board for almost 20 years.
Likewise, today Julian sits on Incyte's board. During 2007 and 2008, when Incyte traded in the high single digits, the brothers built their position to over 11 million shares. In November 2011, the Food And Drug Administration’s (“FDA”) approved Incyte's Jakafi, a pill for the bone-marrow cancer myelofibrosis. The Baker funds now own 30.9 million shares, or 15.4% of the company, a stake worth about $3.7 billion at the current price of $121.35.
How do they know which development stage company will pay off...? Like us, they follow the science and they do all their own homework.
Former Ablynx CEO Edwin Moses met the Baker brothers after they invested in his company in 2017. He said:
"You come out of your first meeting with them, you go 'wow' and you're drenched in sweat."
And, like us, they scale their positions up as the science becomes proven. Virtually all the capital ($1.4 billion) that invested into Seagen went into the business after August 2011, when the FDA approved Seagen's first drug, the lymphoma treatment Adcetris.
You can see how they approach investing by studying their moves around the new drugs being developed to treat MASH (a fatty-liver disease that can progress to scarring and cirrhosis). There were two approaches being developed. Sagimet Biosciences' (Nasdaq: SGMT) drug, denifanstat, blocks the enzyme that builds new fat out of sugar. Madrigal Pharmaceutical’s (Nasdaq: MDGL) drug Rezdiffra turns the liver's fat-burning switch back on.
Baker Brothers owned both. Both drugs produced real biopsy data in mid-stage trials, and both won the FDA's Breakthrough Therapy designation. And Madrigal won: Rezdiffra became the first approved MASH drug in March 2024, and it sold $364.3 million in Q2 2026, up 71%, to more than 49,000 patients. (That’s why we recommended selling Sagimet in August and buying Madrigal instead.)
The brothers have been among Madrigal's largest investors since 2016. They added about 30% to the position in early 2020, at $65 to $90 a share, and again in late 2023, at $120 to $237. By March 2024, the month of approval, they owned 9.99% of the company, and Julian was chairman. In August 2025, with the drug approved and the stock at more than twice their 2023 price, they bought more at $354 to $373. Madrigal closed today at $503.96, which puts the Baker stake of about 2.1 million shares at roughly $1 billion.
Their Sagimet position as of June 30 was 952,996 shares, worth $7.4 million. The Bakers had more than $150 in Madrigal for every $1 in Sagimet. And they scaled in as the science was proven. The Bakers made a fortune on Madrigal because they bet in proportion to the evidence.
The other factor is time. I’ve seen this in Stansberry Research analyst David Lashmet’s biotech investing too. These development companies require a long time horizon. The Bakers held Incyte for eight years before Jakafi was approved, Madrigal for eight years before Rezdiffra’s approval, and Seagen for 20 years before Pfizer wrote its check.
There were periods – years – during which these investments looked like dead money. In biotech, if you’re following the science, patience pays.
Using the inspiration of the Baker Brothers, Porter further expands on the portfolio that he continued developing last month. To see the remainder of this issue, new recommendations, and full access to the Porter & Co. Biotechnology portfolio, click here.
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