Warren Buffett makes ‘risky’ $192M wager on Biogen

Feb. 20, 2020

Warren Buffett’s investment company, Berkshire Hathaway, revealed in a regulatory filing this week that it has invested about $192 million in Biogen — one of its first gambles in the biotech industry.

Some analysts have called the investment “risky” given that Biogen is facing increasing market competition in its key therapeutic franchise for multiple sclerosis drugs. Biogen could also soon be facing competition to its primary driver of growth last year — a spinal muscular atrophy drug, Spiranza — as Roche is expected to have a similar drug approved by the FDA in May.

Much of Biogen’s potential future growth is currently hinged on its potential Alzheimer’s candidate — aducanumab. Although the drug seemed to fail a late-stage study last year, Biogen later made the surprise announcement that it is still seeking FDA approval for aducanumab based on further analysis from two earlier clinical studies.

Analysts have also pointed out that Berkshire’s track-record in other health care investments haven’t been much to brag about. In the last few years, shares have declined or lagged for all three of the other health care companies it currently owns stocks in: Teva, J&J and DaVita.  

But if Biogen pulls off an FDA win with aducanumab, the payoff could be massive, with analysts forecasting blockbuster levels of sales.