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Stock Watch: How Tariff Threat Might Boost Pharma Q1

Pre-Empting Trade Tariffs May Have Mimicked Pandemic Inventory Builds

 
• By Andy Smith

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.

Stock Watch Image, Andy Smith
ANDY SMITH OFFERS A LIFE SCIENCE INVESTOR'S PERSPECTIVE ON BIOPHARMA BUSINESS
Key Takeaways
  • Many drug company stocks have performed well so far this year.
  • This may be due to inventory builds in advance of drug tariffs.
  • Novo Nordisk is one significant exception to first-quarter drug company stock strength, partly due to the prospects of tariffs on its products.

Within a few days of the fifth anniversary of the declaration of the COVID-19 pandemic by the World Health Organization, the first quarter of 2025 headed towards its close. The first three months of 2025 to 30 March was a bruising period for the broad stock market with the S&P 500 index declining by over 5%. This was accompanied by plummeting consumer confidence

However, extending the time window to six months, the situation is reversed with the S&P 500 ending the period up by almost 3% thanks to the halo effect of the new US administration and hopes for a pro-business, and low-tax environment

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Stock Watch: Stock Watch: Lilly And Novo Duke Out Q1

 
• By Andy Smith

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.

Stock Watch: Market Optimism Outshines Q1 Currency And Tariff Woes

 
• By Andy Smith

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.

Stock Watch: Sanofi, Merck Open Windows Into Geopolitical Risks

 
• By Andy Smith

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.

Stock Watch: Dollar Weakness, Tariffs, Biosimilars In J&J’s Q1 Mix

 
• By Andy Smith

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.

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