Last week, Biogen (BIIB) closed near a 52-week low of $150.03. The stock trades at a discount because the biotech firm lacks growth catalysts.
Demand for Biogen’s Alzheimer’s drug, Leqembi, is still slow. Although analysts at Needham are expecting growth starting in 2026, overall revenue will decline this year. Next year, growth is flat at best. The firm’s new CEO, Chris Viehbacher, will lead significant changes for Biogen. Next year, Biogen will cut costs, which totals gross savings of $1 billion by the end of 2025.
Pfizer (PFE) is trading close to its low for the year, which lifted its dividend yield to around 6.6%. The drug company’s tailwinds from Paxlovid, an antiviral drug to treat Covid, will slow down after the flu season. Still, Pfizer has a second-generation Paxlovid in clinical trials.
The $5.5 billion in cost cuts will raise Pfizer’s return on investments. Investors should expect that the company achieves right sizing the research and developments, cost of goods sold, and lower sales and marketing.
Stuck in a downtrend, GSK (GSK) is due to rebound. The firm reported that belantamab mafodotin, a drug for treating multiple myeloma at or after the first relapse, reduced the risk of death by 42%.
Your Takeaway
Markets discounted drug developers on worries that the incoming U.S. Administration will hinder their growth. When the fear subsides, those stocks should recover.