Please ensure Javascript is enabled for purposes of website accessibility

Why BioMarin Pharmaceutical, Bristol-Myers Squibb, and bluebird bio Are Getting Hammered Monday

By George Budwell - Updated Mar 16, 2020 at 12:42PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

These biopharma stocks are taking a big hit because of the COVID-19 pandemic.

What happened

Biopharmaceutical stocks are taking another serious beating today. Shares of BioMarin Pharmaceutical (BMRN -1.25%) fell by as much as 10%, Bristol-Myers Squibb's (BMY -0.95%) stock dipped by 12.7%, and bluebird bio (BLUE -9.61%) lost 18.7% of its value in early-morning trading.

Fortunately, all three of these biopharma stocks have bounced off their intraday lows -- at least to a degree. Nonetheless, BioMarin's stock is still down by 6.24%, Bristol's shares are off by 3.24%, and bluebird is trading 11% lower from where it started the day, as of 12:07 p.m. EDT Monday. 

A red arrow indicating a rapidly declining trend.

Image source: Getty Images.

So what

These top biopharma companies are taking another step backward today in response to the rapid spread of the COVID-19 illness, which is threatening to push the world into an economic recession. The Federal Reserve took decisive action on Sunday by cutting interest rates to near zero and announcing plans to roll out a $700 billion quantitative easing program soon.

The moody market, however, is clearly unfazed by the latest fiscal-policy move, which is designed to ensure the smooth functioning of the financial system during this chaotic period. Companies like BioMarin, Bristol, and bluebird, after all, probably won't even experience a dramatic impact to their top or bottom lines from this global pandemic. This is panic selling, plain and simple.

Now what

Are any of these biopharma stocks worth buying on the heels of this panic-induced downturn? BioMarin sports a solid portfolio of rare disease medications that are currently racking up sales at breakneck pace. What's more, the company should bring two more high-value drugs to market in the near future. So, in a word, it might be a good idea to add this name to your portfolio in the wake of this largely unwarranted sell-off.

The same arguably goes for Bristol's stock. Bristol's oncology portfolio and pipeline are among the very best in the industry. Moreover, there's no reason to believe that cancer patients are going to stop receiving treatment because of the COVID-19 pandemic. Bristol may experience a modest drop-off in international sales, but not to the degree the market is forecasting via this pullback. 

Bluebird may be a different story altogether. The company has been locked in a prolonged downward trend due to concerns about potential competitors in the rare blood disorder space. These fears may turn out to be unwarranted, but it's arguably a good idea to take a wait-and-see approach with this name for the moment. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

BioMarin Pharmaceutical Inc. Stock Quote
BioMarin Pharmaceutical Inc.
$82.87 (-1.25%) $-1.05
Bristol Myers Squibb Company Stock Quote
Bristol Myers Squibb Company
$77.00 (-0.95%) $0.74
bluebird bio, Inc. Stock Quote
bluebird bio, Inc.
$4.14 (-9.61%) $0.44

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.