6. Biogen Inc. (NASDAQ:BIIB)
Year to Date Gain: -28.04%
Number of Hedge Fund Holders: 46
Massachusetts-based Biogen Inc. (NASDAQ:BIIB) discovers, develops and delivers therapies for treating neurological and neurodegenerative illnesses. In the competitive drug development sector, the stock has underperformed, by 28.04%.
The underperformance, which has cemented Biogen’s status as one of the worst performing NASDAQ stocks in 2024, comes on the company suffering a series of setbacks with its Alzheimer’s treatment, Leqembi. Declining sales of key multiple sclerosis (MS) treatments, Tecfidera and Tysabri, have only exacerbated the situation, fuelling the stock sell-off.
In addition, Biogen Inc. (NASDAQ:BIIB) has faced significant headwinds due to decreased contract manufacturing and royalty income. Similarly, the company delivered disappointing second-quarter results, with revenue coming in flat at $2.5 billion as adjusted earnings per share increased 31.3% in the fiscal second quarter of 2024.
The company has embarked on a cost-cutting drive targeting $1 billion in savings by 2025. There are concerns that cutting costs would make it difficult for Biogen Inc. (NASDAQ:BIIB) to strengthen its product pipeline and, therefore, strengthen its revenue base.
Management anticipates a 1% to 5% drop in revenue this year despite the new drug launches. That is not encouraging for a company trying to generate enough growth from its latest products to appease investors in the near future.
Amid a string of disappointing reports, the company has achieved a significant milestone in treating kidney transplant rejections. The U.S. Food and Drug Administration awarded felzartamab, a treatment for late antibody-mediated rejection (AMR) in kidney transplant recipients, Breakthrough Therapy Designation. BTD is given to preclinical medication candidates for life-threatening illnesses that have shown promise in significantly outperforming current therapies.
46 hedge funds held positions in Biogen Inc. (NASDAQ:BIIB) at a stake value of $1.49 billion in Q2 of 2024.
Patient Capital Management’s Patient Capital Opportunity Equity Strategy stated the following regarding Biogen Inc. (NASDAQ:BIIB) in its Q2 2024 investor letter:
“Biogen Inc. (NASDAQ:BIIB) is another name that we believe is underappreciated. As a global biopharmaceutical business, the company is most well known for their products in multiple sclerosis, spinal muscular atrophy, and most recently Alzheimer’s disease. The new CEO, Christopher Viehbacher, is working to improve the company’s pipeline, most recently with their acquisition of Human Immunology Biosciences Inc. in May. Chris has a strong track record of successful M&A and we expect him to continue that tradition. More importantly, we think the market is currently giving the company no credit for success in their Alzheimer’s indication. While the uptake in Leqembi, their Alzheimer’s product, has been slow, we still see strong long-term potential for a patient population that is dramatically underserved. We find the risk/reward extremely attractive.”
