Stock Watch
The information flow in the months before the approval of GSK’s Nucala in COPD provides an interesting case study, and brings to mind the cautionary tale of Alnylam’s Onpattro.
Pharma firms tended to downplay first-quarter trends in full-year guidance. However, raised guidance seems fragile amid ongoing foreign exchange effects and Medicare Part D redesign pressures.
Investors welcomed Bavarian Nordic’s and Bayer’s earnings announcements. However, both stock prices declined over the day of their reports as the impact of recent pressures weighed.
Novo Nordisk enjoyed a surprise GLP-1 agonist contracting win in the first quarter of 2025. This provided a welcome boost to its stock after it had spent the previous quarter on the back foot against rival Lilly.
The weak US dollar helped some companies reporting first-quarter results and hindered others reporting in stronger currencies. But even the impacts of currencies and Medicare modernization on first-quarter revenues were overlooked when an end to the trade wars seemed possible.
First-quarter results season featured tariff talk but without any full-year quantitation. As tariffs and foreign exchange movements bump up against capped drug prices, profitability could suffer.
Announcing increased full-year earnings guidance and another dividend increase, Johnson & Johnson’s stock price weakened, outweighed by concerns about the replacement of Stelara revenues and possible drug import tariffs.
The end of the American College of Cardiology conference was a prelude to a volatile trading week for most stocks. Even before Liberation Day, reactions to the conference announcements were not encouraging.
Supply chain disruption fears at the start of the COVID-19 pandemic caused drug over-ordering. Imminent tariffs on drugs may have had a similar effect on pharma sales in Q1 earnings season.
The promise of innovative therapies seems to have been constrained not by efficacy or safety concerns, but because the high price of treatments is incongruous with the reimbursement of short-course therapies.
After lowering its full-year earnings guidance just six weeks before the end of 2024, Bayer, by talking up of the prospects for its new drug launches and a major clinical trial result in 2025, might risk damaging its integrity further.
CSL’s US influenza vaccine sales were a window into wider issues for vaccine manufacturers that had already impacted the fourth-quarter results of Merck, Pfizer and GSK. There could also be a correlation between lower vaccine sales and the measles outbreak in Texas.
Two pharmaceutical companies reporting bumper sales in the hot areas of diabetes and obesity may have helped a thaw in sector sentiment.
Taking a broad view of big pharma share price movements as the sector reported 2024 financials, company-specific issues were complicated by geopolitical factors including Donald Trump’s tariff announcements.
What a company says – and does not say – about its outlook can sway sentiment. Meanwhile, the snapshot of a big pharma’s quarterly results offers an insight to the circle of a portfolio’s life, with new products ascending to blockbuster status as previous blockbusters disappear.
When a sector re-rates and goes out of favor against the backdrop of wider headwinds, even sales growth may not distract investors from greener grass in other sectors.
After a less auspicious prelude and a positive start to the biggest healthcare conference of the year, the news flow and investors’ support for biotech initially improved.
Big pharma is under pressure to find the next big thing, and new launches bring high hopes. But focusing on the number of new drugs approved each year may mislead on the sector’s success if profitability and significant sales elude a majority.
From gene therapies to small molecule drugs, investors seemed to have eschewed the risks of biotech company investment propositions in 2024 but last year’s disappointments provided good lessons going forward.
While Pfizer’s analysts’ meeting cheered its investors with clear guidance, Novo Nordisk presented disappointing obesity data. The true value of CagriSema cannot be estimated without more information, however.