Biogen's Bad Week

If you're a Biogen shareholder, you don't need me coming along to tell you that this has been a bad week. The Alzheimer's antibody news was just the warmup for the company's earning numbers, which made no one happy.

So what's going on over there? Reality, I'd say. The drug industry is ferociously competitive, and no one's earnings are safe. Clinical trials are still coming in with about a 10% rate of success overall, which is the sort of risk level that would send a lot of other industries fleeing in terror. Time and chance happeneth to them all. (And no, I'm not religious at all, but a lot of Ecclesiastes is just good common sense).

So yeah, Biogen as I write this is down about $70 a share, a solid 18% whacking. By the month, by the year-to-date, by the previous year, you're probably not happy if you've been holding the shares. But over the last five years, even with today's debacle, Biogen has beaten all the indices savagely. The five-year NASDAQ is up about 126%, and the five-year S&P 500 is up 90%. Note: earlier figure was incorrect (typed something wrong into the database!), and these figures, as noted in the comments, do not reflect dividends. But then, they don't reflect taxes on those dividends, either. . . Biogen is up 485% over that span, and you know what? Hardly anything ever goes that well in this business for that long, on that large a scale. That's a terrific run.

So if you're a Biogen shareholder right now, sure, you're wondering about the company's earnings prospects, its pipeline, whether or not it's going to do some sort of acquisition (rumors are out there about Isis, and probably others). Worthy questions, and I don't know the answer to any of 'em. If you bought the company's stock back early this year on the basis of (say) those Phase I Alzheimer's results, well. . .you know what happens, most all the time, when you live by the sword, right? If you didn't, well, you do now. But if you've been a longer-term shareholder, you really don't have much to complain about.