In this article, we discuss 15 worst performing biotech stocks in 2023. If you want to skip our detailed discussion about the biotech industry, head directly to 5 Worst Performing Biotech Stocks in 2023.
The biotech industry was the center of global attention during the pandemic. With accelerated efforts to come up with vaccinations to restore order to the world, the industry experienced a heavy boost. However, since the pandemic, the situation has changed. Although the global biotech industry is valued at $1.2 trillion according to Precedence Research, and is expected to grow at a CAGR of 12.8% between 2023-2030, the industry has definitely slowed down, as it adjusts to the post pandemic biotech market.
As the demand for vaccinations reduced, revenues have been dropping over the last couple of quarters. As perErnst & Young, revenues for public companies dropped by 1% in 2022. In addition to this, there are growing concerns that the Federal Trade Commission (FTC) will restrict acquisitions by larger pharmaceuticals. This would make it difficult for companies to secure funding and innovate. Furthermore, the United States passed a new legislation in August, 2022 – the Inflation Reduction Act. Its objective is to decrease inflation by reducing the federal deficit, and investing in green energy. However, this affects the biotech industry as prices for drugs are going to be lowered. The resulting pricing pressure represents a major risk for innovation in the biotech sector, as it becomes unclear how companies would be reimbursed. In the last year, the US Food and Drug Administration’s (FDA) approvals for licenses were significantly reduced. Consequently, funding in biotech experienced a major decrease. This includes venture capital investment, debt financing, and IPOs. The biotech IPO market decreased by over 93% from 2021, with only 29% of European and American companies having cash reserves to last only a year.
Currently, the Federal Reserve is expected to continue raising interest rates. This would directly impact the ability for companies to raise capital and finance research and development. Furthermore, BioPharma Dive'sdata indicates that as of April 2023, more than 5,000 workers have been laid off from biotech and pharmaceutical firms this year alone. All of these challenges contributed to the industry performing poorly, as share prices plummeted from a historic high in 2022 as well.
Investors looking to invest in the biotech sector can look into the performance of Moderna Inc. (NASDAQ:MRNA), BioNTech SE (NASDAQ:BNTX), and Apellis Pharmaceuticals, Inc (NASDAQ:APLS) before making any decisions.
Our Methodology
We used a stock screener and filtered out biotech stocks with market caps above $2 billion as of August 7. We did this to eliminate extremely small companies which have volatile performance and are not an appropriate indicator of the biotech industry performance overall. Then, we sorted the stocks in the descending order of their year-to-date share price performance. From the resulting dataset, we selected the biotech stocks with the highest YTD share price declines as of August 7. The following stocks are arranged in the ascending order of their share price declines.
Jazz Pharmaceuticals plc (NASDAQ:JAZZ) focuses on neuroscience, including research and development for products that cater to different disorders. A key area for the company is sleep and movement disorders, in addition to cancer studies. On May 10, Jazz Pharmaceuticals plc (NASDAQ:JAZZ) announced a Q1 non-GAAP EPS of $3.95, missing the consensus estimate by $0.27. The company announced a revenue of $892.8 million, which was $5.25 million below the Street estimates.
According to Insider Monkey’s first quarter database, a total of 40 hedge funds were bullish on Jazz Pharmaceuticals plc (NASDAQ:JAZZ), as opposed to 38 funds in the previous quarter. Bernard Horn’s Polaris Capital Management is the leading shareholder, with 1.30 million shares worth $191.3 million.
Like Moderna Inc. (NASDAQ:MRNA), BioNTech SE (NASDAQ:BNTX), and Apellis Pharmaceuticals, Inc (NASDAQ:APLS), Jazz Pharmaceuticals plc (NASDAQ:JAZZ) is one of the worst performing biotech stocks in 2023.
Incyte Corporation (NASDAQ:INCY) aims to provide medical solutions for cancer and autoimmune disorders globally. On August 1, Incyte Corporation (NASDAQ:INCY) reported a Q2 non-GAAP EPS of $0.99, outperforming market estimates by $0.12. The company’s revenue of $954.61 million also exceeded analysts’ expectations by $44.2 million. This has led the company to revise its full-year 2023 guidance, and it now expects to close the year with a revenue ranging from $2.58 billion to $2.63 billion. Nevertheless, the shares have tanked almost 18.5% year-to-date, making Incyte Corporation (NASDAQ:INCY) one of the worst performing biotech stocks in 2023.
According to Insider Monkey’s first quarter database, 41 hedge funds were bullish on Incyte Corporation (NASDAQ:INCY), compared to 38 hedge funds in the previous quarter. Julian Baker and Felix Baker’s Baker Bros. Advisors is the largest shareholder of the company, with over 36 million shares worth $2.6 billion.
Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) is a biopharmaceutical company with a focus on research, identification, commercialisation, and development of treatments for rare diseases in North America, Asia, Europe, and Latin America. On August 3, Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) reported a Q2 GAAP loss per share of $2.25, missing market consensus by $0.15. In contrast, the company reported a revenue of $108.3 million, which outperformed analysts’ estimates by $3.31 million. Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) remains one of the worst performing biotech stocks in 2023 based on year-to-date share price performance.
According to Insider Monkey’s first quarter database, 42 hedge funds were long Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE), as compared to 38 funds in the last quarter. David Witzke and Michael Gregory’s Avidity Partners Management is the largest shareholder of the company, with 2.12 million shares worth $85.2 million.
12. Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI)
YTD Share Price Decline as of August 7: 19.28%
Number of Hedge Fund Holders: 21
Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) specializes in the research, development and commercialisation of treatments for different human diseases. On May 8, Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) announced a Q1 non-GAAP EPS of $0.03, which missed the consensus estimates by $0.01. Moreover, it has reported a revenue of $79 million, also falling short of the Wall Street forecast by $0.72 million. Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) is one of the worst performing biotech stocks in 2023, given the shares have plummeted 19.28% year-to-date as of August 7.
According to Insider Monkey’s first quarter database, 21 hedge funds were bullish on Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI), in contrast to 22 from the previous quarter. Joel Ramin’s 12 West Capital Management holds the largest position in Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI), with 2.5 million shares worth $36 million.
ClearBridge Small Cap Value Strategy had this to say about Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI) in its Q4 2022 investor letter:
“Another detractor during the period was Maravai LifeSciences Holdings, Inc. (NASDAQ:MRVI), which provides products to enable the development of drug therapies, diagnostics, novel vaccines, and support research on human diseases. The company continues to face headwinds from both investor skepticism over the loss of its COVID-19 revenue and continued supply chain disruptions in the company’s bioprocessing consumables division, which weighed on the stock’s performance. We believe the value of the company’s nucleic acids business has been overly discounted relative to its long-term potential, and that the company’s position as a leading supplier to the growing field of mRNA vaccine research and development leaves it well positioned to be a long-term compounder within the portfolio.”
Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) focuses on the research and development of RNA-based solutions to different kinds of diseases in the United States. It classifies as one of the worst performing biotech stocks this year. On May 2, Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) reported a Q2 GAAP EPS of $0.45 and a revenue of $146.26 million, beating market estimates by $1.06 and $100.78 million, respectively. However, the stock plummeted on July 7 due to insider selling by Tracie Oliver, the chief commercial officer for Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) and James Hamilton, head of the non-clinical and early clinical development.
According to Insider Monkey’s first quarter database, 24 hedge funds were bullish on Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR), compared to 22 funds in the prior quarter. David Witzke and Michael Gregory’s Avidity Partners Management held the largest position in the company, with 1.7 million shares over $44 million.
Baron Opportunity Fund had this to say about Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) in its Q1 2023 investor letter:
“Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR), a biotechnology company specializing in RNA interference (RNAi) medications to treat a variety of diseases, detracted from performance. The company has lacked major wins in recent years, while also tallying some losses. Management’s late-stage drug licensing efforts to drive upfront and running royalties to bolster its balance sheet and ensure a longer cash runway have also pressured shares. Reinvigorating the company’s strategic story remains a key consideration for Arrowhead going forward. Last year, we reduced our portfolio weighting in Arrowhead but decided to maintain a foothold position. We believe Arrowhead’s efforts to target RNAi to the lungs will open a new therapeutic area of exploration. In our view, this initiative may lead to RNAi economies of scale, allow for an expansion of pipeline and collaboration opportunities, and generate a long runway for growth.”
Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) core area of focus is ribonucleic interfaces. The company is engaged in the development of medicine for genetic, cardio-metabolic, and central-nervous-system disorders. On August 3, Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) reported a Q2 non-GAAP loss per share of $1.62, underperforming market expectations by $0.28. Similarly, the company reported a revenue of $318.75 million. This was lower than the Street estimates by $31.82 million.
According to Insider Monkey’s first quarter database, a total of 37 hedge funds were bullish on Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY). In comparison, 35 hedge funds held a similar position in the previous quarter. Kurt Von Emster’s VenBio Select Advisor has the largest stake in the company, with 1.10 million shares worth $221.3 million.
ClearBridge Select Strategy had this to say about Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) in its Q4 2022 investor letter:
“Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), a biotech that develops RNA therapies to target and turn off certain proteins in the body, has a number of drugs in the market whose revenues are expected to end the excessive cash burn that has plagued the company’s shares. As more drugs are launched and pipeline investments are more focused under new leadership, we believe the company will be an increasingly attractive asset.”
Next on our list of the worst performing biotech stocks this year is Royalty Pharma plc (NASDAQ:RPRX), a company that funds innovative solutions in the pharmaceutical industry by acquiring royalties on medical therapies. On July 17, Royalty Pharma plc (NASDAQ:RPRX) declared a quarterly dividend per share of $0.20, which is payable on September 15 to shareholders of record as of August 18.
According to Insider Monkey’s first quarter database, 31 hedge funds were bullish on Royalty Pharma plc (NASDAQ:RPRX). In comparison, 36 hedge funds held bullish positions in the company during the previous quarter. Andreas Halvorsen’s Viking Global held the largest stake in the company, with 11.20 million shares worth $403.6 million.
Ascendis Pharma A/S (NASDAQ:ASND) focuses on the development of therapies for rare diseases. On April 27, Ascendis Pharma A/S (NASDAQ:ASND) reported a Q1 GAAP loss per share of $2.18, which outperformed expectations by $0.69. It also reported a revenue of $37.02 million, topping Street forecasts by $13.41 million. On May 1, the United States Food & Drug Administration (FDA) rejected TransCon PTH, developed by Ascendis Pharma A/S (NASDAQ:ASND) to treat adults with hypoparathyroidism. Despite the rejection, the company remains positive and expects to get it approved by the end of 2023.
According to Insider Monkey’s first quarter database, 26 hedge funds were bullish on Ascendis Pharma A/S (NASDAQ:ASND), as compared to 33 funds in the earlier quarter. Peter Kolchinsky’s RA Capital Management is the largest shareholder in the company, with nearly 7 million shares worth $746 million.
Baron Health Care Fund said this about Ascendis Pharma A/S (NASDAQ:ASND) in its second quarter 2023 investor letter:
“Ascendis Pharma A/S (NASDAQ:ASND) is a biotechnology company dedicated to creating long-acting versions of various short-acting proteins or efficacious drugs where the long-acting version provides pharmacology benefits, including improved recapitulation of the drug’s physiologic behavior, longer half-life, improved bioavailability, and lower maximum concentration to blunt side effects, as well as patient convenience, such as weekly versus daily shots. Initial efforts have focused on growth hormone and parathyroid hormone replacement drugs. Shares fell in response to an unexpected FDA issue weeks before the expected approval of Transcon PTH, Ascendis’ drug for hypoparathyroidism. Approval of Transcon PTH was delayed, which sent shares down substantially for the period held. We sold our shares to harvest a tax loss.”
Halozyme Therapeutics, Inc. (NASDAQ:HALO) is involved in the commercialization of proprietary enzymes and devices in Europe, United States, and Japan. On May 9, Halozyme Therapeutics, Inc. (NASDAQ:HALO) reported a Q1 non-GAAP EPS of $0.47 and a revenue of $162.14 million, missing Wall Street expectations by $0.01 and $13.38 million, respectively. It is one of the worst performing biotech stocks in 2023 based on year-to-date share price performance.
According to Insider Monkey’s first quarter database, 29 hedge funds were bullish on Halozyme Therapeutics, Inc. (NASDAQ:HALO), as opposed to 23 hedge funds in the previous quarter. Ken Griffin’s Citadel Investment Group is the largest shareholder in the company, with 921,421 shares valued at $35 million.
Carillon Eagle Small Cap Growth Fund had this to say about Halozyme Therapeutics, Inc. (NASDAQ:HALO) in its first quarter 2023 investor letter:
“Halozyme Therapeutics, Inc. (NASDAQ:HALO) is a biopharmaceutical technology platform company. The Centers for Medicare & Medicaid Services recently provided additional guidance on the Inflation Reduction Act that could hurt sales of Darzalex Faspro, the company’s main product. According to the published guidance, price negotiations for Darzalex will occur much earlier than originally expected, posing a risk to the durability of the company’s largest royalty stream.”
Cytokinetics, Incorporated (NASDAQ:CYTK) is involved in the research, development, and production of muscle activators and other treatments for physical conditions that restrict movement. On August 3, Cytokinetics, Incorporated (NASDAQ:CYTK) reported a Q2 GAAP loss per share of $1.34 and a revenue of $0.87 million, falling short of market estimates by $0.18 and $5.18 million, respectively.
According to Insider Monkey’s first quarter database, 35 hedge funds were long Cytokinetics, Incorporated (NASDAQ:CYTK). In comparison, 40 hedge funds held a similar position in the company during the previous quarter. Brian Ashford-Russell and Tim Woolley’s Polar Capital held the largest position in the company, with 2.6 million shares worth $92 million.
In addition to Moderna Inc. (NASDAQ:MRNA), BioNTech SE (NASDAQ:BNTX), and Apellis Pharmaceuticals, Inc (NASDAQ:APLS), Cytokinetics, Incorporated (NASDAQ:CYTK) is also one of the worst performing biotech stocks of 2023.
This is what Baron Funds had to say about Cytokinetics, Incorporated (NASDAQ:CYTK) in its Q3 2022 investor letter:
“Cytokinetics, Incorporated (NASDAQ:CYTK) is a biotechnology company developing novel drugs for cardiovascular disease, starting with heart failure and hypertrophic cardiomyopathy. Shares increased largely due to pull through from this summer’s positive results in the Phase 2 trial of its drug aficamten and the market perception of Cytokinetics as a desirable M&A target. We will be closely monitoring the upcoming commercial approval of lead asset omecamtiv mecarbil and results from the commercial launch of Bristol Myers’ mavacamten, a competitor of aficamten.”
