Stock Watch
With drug sector indexes underperforming the broad market in the first half of 2025, investors may have been anticipating tariff-related and other headwinds. But impending loss of exclusivity on key products may be provoking more anxiety at this point.
Pharma company financial guidance emerged largely unscathed from a first quarter punctured by a weakening US dollar and threats of import tariffs on drugs. With other pressures either already evident or on the horizon, guidance revisions may be unavoidable.
Relaxing CAR-T restrictions may not be an access panacea because of patient fragility and lack of payer incentive. Conversely, the ACIP’s recent recommendation on Thiomersal-containing flu vaccines is probably the thin edge of a more restrictive wedge.
A track record of positive portfolio performance is described as an investment management skill. Taking difficult divestment decisions early, in challenging markets and outperforming benchmarks, are hallmarks of this skill. Syncona and Woodford Patient Capital offer useful case studies.
The number of viable biotech companies exploiting a particular technology should be limited by intellectual property but the number of biotech IPOs exploiting that same technology always seems greater than those with freedom to operate.
Successive annual reductions in European drug prices following the pandemic are affecting the global sales of generic pharmaceutical companies. Additionally, the imposition of US import tariffs may result in generic drug supply becoming unprofitable.
A recent study suggested that measles could become endemic in the US due to low vaccination rates. However, first-quarter vaccine sales offered a more nuanced picture.
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.