Should You Hold Crinetics Pharmaceuticals (CRNX)?
PGIM Jennison Health Sciences Fund released its first quarter 2025 investor letter. A copy of the letter can be downloaded here. The S&P 1500 Health Care Index returned 5.5% in the first quarter, outperforming the S&P 500’s -4.3% return. Biotechnology and healthcare providers and services surpassed the Index in performance during this quarter. Pharmaceuticals, healthcare technology, and medtech also saw gains but lagged the Index. Conversely, life sciences tools and services declined over the same period. During the quarter, the Fund experienced a loss in value, underperforming the Index. Stock selection in biotechnology was the primary cause of the fund's relative underperformance. Stock selection in pharmaceuticals was another area of relative weakness. Whereas stock selection in health care providers, biotechnology, and underweight to life sciences tools & services contributed to better relative results. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first quarter 2025 investor letter, PGIM Jennison Health Sciences Fund highlighted stocks such as Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX). Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) is a clinical-stage pharmaceutical company. The one-month return of Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) was -12.15%, and its shares lost 39.75% of their value over the last 52 weeks. On July 7, 2025, Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) stock closed at $29.06 per share, with a market capitalization of $2.722 billion.
PGIM Jennison Health Sciences Fund stated the following regarding Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) in its first quarter 2025 investor letter:
"Crinetics Pharmaceuticals, Inc. (NASDAQ:CRNX) is a clinical-stage biotech company focused on developing oral small molecules for endocrine indications. Their lead asset is Paltusotine, an oral soluble ST2 (SST2) agonist in development for acromegaly and carcinoid syndrome. The company has completed their pivotal trials in acromegaly and has a Prescription Drug User Act (PDUFA) date set for 9/25/25 and also plans to start a pivotal phase 3 study in carcinoid syndrome shortly. The company's second asset Atumelnant, an oral adrenocorticotrophic hormone (ACTH) antagonist, is in development for Congenital Adrenal Hyperplasia (CAH) and Cushing's Disease. In June 2024 the company presented interim data for Atumelnant in both indications with stunning results, leading to significant share appreciation through the rest of 2024. In January 2025 the company reported the full data from their phase 2 CAH study. Here we saw a reduction in efficacy from the initial data cut and two patients showed elevated liver enzymes, resulting in a sell off of the stock. We believe the sell off is overdone given the reduction in efficacy was driven by non compliance, which can be resolved for a phase 3 trial, and one of the liver enzyme elevations cases appears unrelated to Atumelnant. The ongoing Open Label Extension study will further clarify Atumelnant's safety profile. The company lacks significant clinical data catalysts this year, but we expect the stock to gradually appreciate over time as we get more color on Atumelnant and we get updates from Crinetics's earlier stage pipeline."
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