Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Repligen Stock Gained 12.8% in March

By Maxx Chatsko – Apr 9, 2020 at 8:45AM

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

The bioprocess company was a rare bright spot for investors, although the worst is likely yet to come for the stock.

What happened

Shares of Repligen (RGEN) rose nearly 13% last month, according to data provided by S&P Global Market Intelligence. That easily bested the 12.5% drop of the S&P 500 in March. But the stock's performance probably had little to do with the coronavirus pandemic.

Investors likely remember that shares tumbled at the end of February when the company reported full-year 2019 operating results. The business delivered impressive revenue and earnings growth last year, but Repligen issued full-year 2020 guidance that disappointed Wall Street analysts. 

In other words, Mr. Market figured shares of Repligen had already been through enough and didn't require a correction alongside the rest of the stock market. Investors might want to consider that the worst is yet to come for the growth stock.

An arrow bouncing up shelves on a wall.

Image source: Getty Images.

So what

Repligen develops the consumables and single-use products required to safely and efficiently manufacture biologic drugs, including monoclonal antibodies, cell therapies, and gene therapies. Through a combination of in-house research and development and well-timed acquisitions, the business has capitalized on the remarkable growth opportunities within the biopharma sector.

While the company's diverse customer base has helped it to spread risk in recent years, it might also concentrate risk in the current environment. That's because the coronavirus pandemic has disrupted clinical trials across the pharmaceutical industry, and Repligen generated 65% of full-year 2019 revenue from clinical trials. Mr. Market doesn't seem to be taking that statistic into account.

Now what

Under normal circumstances, Repligen is a formidable growth stock thanks to the company's successful efforts to embed itself into the DNA of the biopharma sector. But these are not normal circumstances. If delays to clinical trials linger for too long, then investors can expect the business to feel the pinch. That said, the company entered 2020 with $528 million in cash, which is more than enough to endure a prolonged period of uncertainty.

Maxx Chatsko owns shares of Repligen. The Motley Fool recommends Repligen. 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

Repligen Stock Quote

*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 10/06/2022.

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.