Biogen Inc. (NASDAQ:BIIB) closed at $225.71 on October 9. The stock has returned 30.5% during the last six months, compared to a 24.3% return for the Insider Monkey Billionaire Index and 15.1% for the State Street SPDR S&P 500 ETF Trust.
Amgen Inc. (NASDAQ:AMGN) closed at $414.87 and has returned 18.6% over the same six months. Gilead Sciences, Inc. (NASDAQ:GILD) closed at $151.17 and has returned 8.8% over the same six months. One of the three reported a net loss over the past year and still generated the most cash of the group.
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Gilead Lost Money and Collected the Most:
Gilead lost more than three billion dollars over the past year and still generated more cash than either of the others. A loss sitting beside the best cash figure in the group means it was written down on paper rather than paid out. Charges left over from acquisitions do that, and they say nothing about whether the medicines are selling.
The day-to-day business backs that up. Gilead’s operating margin of 33.68% sits between Amgen’s and Biogen’s, which is where a healthy large drugmaker should be. Its return on assets of 14.09% is the highest of the three by a clear margin, and that is the measure least affected by how much each company borrows.
Growth favors the two larger ones. Revenue grew at roughly ten percent for both Gilead and Amgen, against 3.40% at Biogen. A paper loss sitting beside the best cash generation in the group is worth more attention than either figure alone, and it is the sort of thing that lifts a name up the pharma dividend names we ranked this year.
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The Balance Sheets Reverse the Order:
Biogen borrows the least of the three by some distance. Gilead and Amgen both carry substantially more debt. That changes how Amgen’s returns read. Its return on equity looks spectacular, but most of that comes from borrowing rather than from the business being unusually profitable. Measured against assets instead, Gilead is well ahead.
Biogen’s earnings fell 84.60% in the most recent quarter, the single worst figure across the group. That collapse is the reason its shares look cheap on next year’s forecasts. Leverage decides how much of a pharmaceutical return belongs to the business rather than to the borrowing, and it is the first thing to check against the quality names we think are worth more than their price.
All three face the same structural problem, which is replacing revenue as patents expire. That is the permanent condition of the industry rather than a passing phase.
The Valuation Case:
Biogen is the cheapest at 13.65 times forward earnings, against 15.29 for Gilead and 16.94 for Amgen, on analyst consensus estimates. The three sit close together, so the question is which one earns its place rather than which one costs least.
Gilead is worth the small premium over Biogen. It produced the most cash and the best return on assets while reporting a loss, and that combination usually corrects upward once the charges stop. Biogen is cheap because its earnings collapsed and its revenue is barely growing. Amgen costs the most of the three and pays the largest dividend, funded by the most borrowing. The cheapest stock in a sector is rarely the one with the fewest problems, which is the case made by the blue-chip payers that dominate hedge fund portfolios.
Conclusion:
The company that reported a loss is the one to study. Gilead produced the most free cash flow in the group and the best return on assets while reporting it, which means the loss was an accounting event rather than a cash one. However, Biogen carries the cleanest balance sheet of the three and trades at the lowest forward multiple. It got there by watching its earnings collapse. The open question is whether the cheapest of the three can grow revenue at all.
Market Sentiment:
Biogen Inc. was held by 59 hedge funds with a combined stake value of about $1.50 billion at the end of Q2 2026 in the Insider Monkey database. This is down from 64 hedge fund holders with a cumulative investment value of around $1.58 billion in the previous quarter.
Amgen Inc. was held by 66 hedge funds with a combined stake value of about $3.14 billion at the end of Q2 2026 in the Insider Monkey database. This is up from 65 hedge fund holders with a cumulative investment value of around $1.63 billion in the previous quarter.
Gilead Sciences, Inc. was held by 76 hedge funds with a combined stake value of about $3.36 billion at the end of Q2 2026 in the Insider Monkey database. This is down from 77 hedge fund holders with a cumulative investment value of around $2.86 billion in the previous quarter.
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This article is originally published at Insider Monkey.
