Stock Watch
Despite group sales growth and its pharmaceutical division revenue weathering a big loss of exclusivity, J&J experienced stock price weakness after its fourth-quarter results announcement as geopolitical tensions depressed stock markets again.
Broad stock market tensions pervaded the atmosphere as the world’s premier healthcare conference got underway.A lack of big-ticket acquisition announcements and continuing drug pricing pressures did nothing to improve stock and index performances.
Often, what companies do not say is more important that what they do. Big headline reasons for falling sales might hide other less palatable and recurring attributions.
A bolus of year-end biotech acquisitions added to the strong performance of the sector in 2025. This activity may attract generalist investors back to the sector, but they should exercise caution.
Investor optimism can mask real risks; Biohaven’s setbacks show the need for objectivity and caution in pharma investing.
Regeneron epitomized best biotech practice by licensing its multi-blockbuster drugs to big pharma partners. Commercial success and the limitations of exclusivity have brought tensions to these relationships.
An investment only becomes appealing when all the ducks are in a row; if just one duck strays, investors can sense trouble and may hesitate before proceeding.
Pair trade strategies – using the stocks of two companies competing against each other with similar products – can be applied to pharmaceutical companies. Better still, where a winner and loser are correctly anticipated, a directional bias can increase profits.
AstraZeneca reported healthy results for the third quarter and its share price went up. Bayer reported poor results and its share price went up even more.
As the tide keeps receding on Pfizer’s pandemic product revenues, their replacement was to come from acquisitions. Seagen and Metsera have shown that execution and overpaying are key risks.
Reduced immunization rates in the US marred the results of both GSK and Merck, but with Merck’s biggest drug approaching its loss of exclusivity, lower vaccine sales and sluggish new product revenues spooked investors. GSK left more room for optimism.
Stock reactions to Sanofi’s and Novartis’s third-quarter results differed and involved a number of moving parts, including weak influenza vaccine sales at Sanofi. Both results were dominated by sales of their biggest drugs.
With third-quarter sales down year-on-year and quarter-on-quarter, Roche instead emphasized its performance over the first nine months of 2025, leading on the cumulative foreign exchange impact in the year to date to explain softer sales growth.
Despite announcing sales growth that is currently weathering the storm of one of its biggest losses of exclusivity and a spin-off of its orthopedic division, J&J’s stock price weakened after its earnings announcement. Investors probably wanted more visibility on MFN.
Leaning on the “totality of the data” despite proof of functional efficacy, some biotechs seek conditional approval for rare disease drugs. The experiences of PTC, Sarepta, Sage and Intercept illustrate the risks of this approach.
Raising UK drug prices and offering lower list prices only to those US patients who are under- or uninsured were the industry’s initially cosmetic answers to the administration’s most favored nation drug pricing challenge. Then Pfizer stepped in.
The US political environment and vaccine hesitancy by the general population have affected the sale of safe vaccines with clinical utility and no competition. The confusion and contradictions in the recent ACIP meeting are likely to stoke these pressures further.
The removal of a lower-dose version of a drug with years of patent-protected sales remaining in favor of a higher dose, lower-pill count version was billed as a convenience enhancement for patients. Payers, however, do not reimburse convenience.
The first approved anti-PD-1 antibody to market eased ahead of later entrants by sales. But efficacy, tolerability and ease of administration are factors that count beyond first-mover advantage.
Financial announcements that report falling sales or profits may result in share price weakness, while big restructurings, or their extended continuation, can elicit protest votes from shareholders.