Please ensure Javascript is enabled for purposes of website accessibility

Why Biogen Shares Rose 2.59% in March

By Adria Cimino – Apr 2, 2020 at 10:14AM

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

Biogen doesn’t expect the coronavirus outbreak to hurt its business.

What happened

Stocks entered a bear market in March, but shares of Biogen (BIIB 1.04%) moved higher, rising 2.59% during the month, according to data provided by S&P Global Market Intelligence. Biogen gained as investors sought out shares of companies perceived as safe havens during the coronavirus outbreak.

The biotechnology giant last month said it didn't expect manufacturing or supply interruptions and didn't announce any immediate impact on its financial outlook. The company said the timeline of some clinical trials might be altered due to the situation, but so far, trials already underway are continuing as planned.

Three researchers work in a lab.

Image source: Getty Images.

So what

With worldwide cases of COVID-19, the illness caused by the novel coronavirus, now totaling more than 850,600, activity in most sectors has slowed. Though drugmakers are somewhat spared due to the fact they produce essential products, disruptions in manufacturing represent a risk. And some pharmaceutical and biotech companies have announced temporary suspensions in clinical trial enrollment as hospitals devote resources to COVID-19 patients. That could slow time to market for drugs in those trials.

Biogen has the advantage of having 13 drugs on the market, including partnered therapies, as well as more than two dozen drug candidates in the pipeline. With indications like multiple sclerosis and spinal muscular atrophy, Biogen's drugs are necessities. And the number of drugs in the pipeline limits the impact of any potential slowdown in certain clinical trials.

Now what

In Biogen's March statement, the company said it can't rule out future impact to the business as the coronavirus pandemic unfolds. Biotech investors should continue to follow Biogen's comments on the subject, especially if the outbreak deepens. That said, even if Biogen eventually announces impact on manufacturing, clinical trials, or sales, the problems should be temporary. The next big catalyst for Biogen might be any news on aducanumab, its investigational treatment for Alzheimer's disease. During its last earnings report, the company said it plans to submit the drug to the U.S. Food and Drug Administration for review "as soon as possible."

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Biogen. The Motley Fool has a disclosure policy.

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

Biogen Inc. Stock Quote
Biogen Inc.
BIIB
$197.79 (1.04%) $2.04

*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
327%
 
S&P 500 Returns
105%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/27/2022.

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.