Repligen Corporation (RGEN) Benefitted From Drug Approval
In This Article:
Baron Funds, an investment management company, released its “Baron Discovery Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund (Institutional Shares) declined 7.78% underperforming the 2.92% return for the Russell 2000 Growth Index. The lion’s share of negative attribution and 6.52% of negative performance of the fund during the quarter were attributed to the ten worst-performing equities. The firm believes downward movements are more technically tied to macroeconomic issues and the trading environment and could quickly revert. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Baron Discovery Fund highlighted stocks like Repligen Corporation (NASDAQ:RGEN) in the second quarter 2024 investor letter. Repligen Corporation (NASDAQ:RGEN) develops and distributes bioprocessing technologies and systems. The one-month return of Repligen Corporation (NASDAQ:RGEN) was 5.18%, and its shares lost 10.13% of their value over the last 52 weeks. On August 22, 2024, Repligen Corporation (NASDAQ:RGEN) stock closed at $148.08 per share with a market capitalization of $8.293 billion.
Baron Discovery Fund stated the following regarding Repligen Corporation (NASDAQ:RGEN) in its Q2 2024 investor letter:
"Repligen Corporation (NASDAQ:RGEN) is another company benefitting from the massive growth in approvals of biologic drugs (including GLP-1’s). It manufactures equipment that drug companies use to produce these drugs. Like other suppliers to the biologics industry, Repligen has experienced demand headwinds this year from Chinese buyers (now only 5% of sales), the loss of COVID-19 revenue (now insignificant), and a reduction in protein sales due to the loss of a customer and excess channel inventory. These challenges combined for about $75 million in revenues (or about an 11.5% headwind to 2024 sales). Sales were down 20% in 2023 (which we had anticipated when we bought the stock in mid-2023). Unfortunately, shares fell after the company’s very well-liked CEO Tony Hunt decided to step down. Fortunately, Mr. Hunt has agreed to stay on as Chairperson for at least another three years. The timing of this decision was not received well by investors given the bumpy macro environment. We still believe in the long-term prospects for Repligen and its newly appointed CEO, Oliver Loeillot. Mr. Loeillot has been the COO of the company for nine months and was hand-picked by Mr. Hunt to succeed him. We spoke to both men after the announcement and are confident that the current strategic plan will continue to be executed by Mr. Loeillot. In the meantime, Repligen trades at its lowest valuation multiple in five years. Chaos equals opportunity."
