From its spinoff from Biogen(BIIB) in February 2017 to the closing of its acquisition by Sanofi(SNY) in March 2018, Bioverativ’s tenure as a public company was short but profitable. From an initial price of $44.98 to the sale price of $105 in cash, Bioverativ stock, trading under the symbol BIVV, increased 133%. Not bad for 13 months. We were skeptical of the hemophilia drug’s company value, and boy, were we wrong. Even Gabelli & Co. which had set a bullish price target of $58, vastly underestimated the return that was quickly achieved. Biogen has performed not nearly as well, up just 20% today from its price at the time of the spinoff.
Background
Biogen chose to spinoff Bioverativ so that investors might benefit from its faster growth rate. It also faced possible competition in the hemophilia space which left it with some risk. After being discussed throughout 2016, the spinoff was completed on February 1, 2017.
Legacy
Bioverativ’s business lives on as an important part of Sanofi. Biogen continues to be largely dependent on revenue and profit from treating Multiple Sclerosis, but it has a deep pipeline targeting other neurological diseases. Among these is Alzheimer’s, which is notorious for an unbroken record of high profile late stage failures.
Disclosure: The author holds no position in any stock mentioned