When Warren Buffett invests in your company, the attention is a backhanded compliment: Buffett tends to invest when stocks are at bargain prices, so if he's buying, times are tough. And right now, his eyes appear to be on two big pharma companies. Berkshire Hathaway, Buffett's investment company, has recently increased its stake in two rather beleagured drug developers: Johnson & Johnson and Sanofi-Aventis. J&J has been experiencing problems with its stent businessÂ and the company recently announced a 15 percent reduction of its workforce. As a result, J&J's stock is at a low right now and Buffett swooped in to purchase 4 million more shares, bring its total stake to 53 million shares (over $3 billion).Â J&J's markets cap is $177 billion.
Sanofi-Aventis has been weathering its ownÂ problems withÂ would-be obesity blockbuster Acomplia. An FDA expert panel unanimously rejected Acomplia in July out of concerns regarding the drug's potential side effects, which include an increase in suicidal thoughts. As Sanofi's stock sunk, Berkshire HathawayÂ bought 2.7 million more shares, bringing their total to 3.5 million shares, worth $140 million at the end of the quarter. Sanofi's market cap is $107.
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