Please ensure Javascript is enabled for purposes of website accessibility

Why Biogen, GW Pharmaceuticals, and Vertex Pharmaceuticals Stocks Jumped Today

By Keith Speights - Mar 17, 2020 at 4:08PM

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

A rebounding stock market lifted all three of these biotech stocks.

What happened

Shares of several biotechs jumped on Tuesday as the overall stock market rebounded from a major downturn yesterday on reports that a huge federal stimulus package could be in the works. Biogen (BIIB 1.34%) stock was up 9.3% as of 3:13 p.m. EDT. Shares of GW Pharmaceuticals (GWPH) were rising 15% higher. Vertex Pharmaceuticals (VRTX 1.51%) stock was climbing 11.2%.

So what

A federal stimulus package could help individuals and businesses ride out the rough patch the coronavirus outbreak is causing. It's perfectly understandable that investors cheered the news that the U.S. government could make a significant move sooner rather than later.

Test tubes with increasing levels of green liquid with a green arrow sloping upward.

Image source: Getty Images.

But details of a potential stimulus package haven't been announced yet. There's no guarantee that a bill will be signed, especially if proposed legislation includes controversial provisions. More importantly for these three biotech stocks, though, is that their businesses aren't likely to be impacted very much regardless of what a federal stimulus package might include.

Biogen makes most of its revenue from its multiple sclerosis and spinal muscular atrophy drugs. GW Pharmaceuticals' primary moneymaker is cannabidiol drug Epidiolex, which is used to treat two rare forms of epilepsy. Vertex's sales come from its cystic fibrosis (CF) drugs. Physicians aren't going to be more likely to prescribe any of these drugs nor are patients going to be more likely to take the drugs whether or not there's a massive stimulus program.

Now what

The main thing to focus on with Biogen, GW, and Vertex is each company's pipeline progress. Biogen should soon file for FDA approval of experimental Alzheimer's disease drug aducanumab. GW Pharmaceuticals expects an approval decision from the FDA for Epidiolex in treating tuberous sclerosis complex (TSC) later this year. Vertex awaits European approval for its newest CF drug Trikafta.

That's not to say, though, that these biotech stocks won't be impacted by what happens in the overall stock market. All three stocks have dropped during the stock market crash over the last couple of weeks even though Biogen and Vertex have held up better than most stocks have. Good news for the stock market, in general, should translate to good news for each of these drugmakers.

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

Vertex Pharmaceuticals Incorporated Stock Quote
Vertex Pharmaceuticals Incorporated
$280.35 (1.51%) $4.18
Biogen Inc. Stock Quote
Biogen Inc.
$205.23 (1.34%) $2.72
GW Pharmaceuticals plc Stock Quote
GW Pharmaceuticals plc

*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 06/30/2022.

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.