Financial impact: The plunge in shares of Biogen Idec and Elan left several large US funds nursing losses in excess of $700 million (€528.8 million).
But one small US asset management firm was left with almost a $1 billion haircut.
According to the latest filings with the Securities and Exchange Commission (SEC), the biggest holder of Biogen shares was Primecap Management, a firm based in Pasadena, California.
As of December 31st, 2004 Primecap held 32.04 million shares in Biogen, making it the largest shareholder with almost a 10 per cent stake. With Biogen shares trading off about $30.50 in early afternoon trade on the New York Stock Exchange, the 45 per cent slide wiped out $977.2 million in Primecap's holding.
Primecap declined to comment, saying it does not talk to the press. The company manages several Vanguard funds, and was recently praised in a report by Morningstar as a prudent investor. Biogen was also Primecap's largest holding at the end of December, accounting for 4.8 per cent of a portfolio valued then at $43.8 billion, SEC documents show.
While other asset managers also held large stakes, their overall holdings were far larger, diluting the haircut they took on Biogen's plunge.
Smith Barney Asset Management was the number two Biogen holder with 28.9 million shares, an 8.7 per cent stake, but only 1.2 per cent of its portfolio, according to FactSet Research Systems. Other large Biogen stakes amounted to less than one-third of 1 per cent of other portfolios, FactSet said. The biggest shareholders in Elan are also US funds including Capital Research and Management Company which owned 11.47 per cent and Fidelity Management and Research which had a 10.6 per cent.
Both funds saw in the region of $700 million wiped off the value of their holdings yesterday as Elan's shares plummeted almost almost 70 per cent.
Wellington Management Company was the next largest shareholder with 4.54 per cent followed by Growth Fund of America Ltd with 4.45 per cent. Another 16 firms owned between 0.53 per cent and 3.81 per cent.
Jim Mullen, chief executive of Biogen, told investors and reporters that it would not take the companies "a long time" to re-evaluate the clinical trials. But he said "it may take some time to figure out a path forward" for the drug.
