Pharmaceutical Industry Faces a Pivotal Third Quarter
The pharmaceutical sector is entering a critical reporting period as leading drugmakers prepare to release their third-quarter earnings. This year has presented significant challenges, including shifting drug pricing regulations under the Trump administration, potential tariffs on pharmaceutical imports, and increased pressure to enhance U.S.-based manufacturing capabilities. Additionally, Health and Human Services Secretary Robert F. Kennedy Jr.’s extensive federal health agency reforms add further uncertainty. Investors remain focused on potential “most favored nation” pricing agreements, following recent deals with Pfizer, AstraZeneca, and fertility drug leader EMD Serono. These agreements aim to improve American access to vital medications amidst political and market volatility. Concurrently, companies are striving to offset revenue declines from drugs nearing patent expiration.
Merck: Sustained Immunotherapy Demand and New Launches
According to JPMorgan analyst Chris Schott, Merck is unlikely to report any major surprises this quarter. The pharmaceutical giant’s topline growth is expected to be supported by continued strong demand for its immunotherapy Keytruda, alongside steady contributions from its animal health division. New product launches such as Winrevair, targeting a rare and fatal lung condition, and Capvaxive, a vaccine protecting adults from pneumococcal bacteria, are poised to add incremental revenue. However, these gains may be partially offset by sluggish sales of Gardasil in China, a vaccine that prevents HPV-related cancers. Merck’s earnings announcement is scheduled for Thursday.
Eli Lilly: Robust Growth from Diabetes and Weight Loss Drugs
Eli Lilly is projected to deliver strong quarterly results driven by the expanding sales of its diabetes injection Mounjaro and weight management drug Zepbound. Schott anticipates the company may raise its full-year guidance given sustained demand. TD Cowen analyst Steve Scala notes that the market has largely absorbed the impact of Novo Nordisk’s partnership with CVS, which expanded access to Wegovy while limiting Eli Lilly’s Zepbound on CVS drug plans. No significant surprises are expected from Eli Lilly’s upcoming earnings report, also due Thursday.
Bristol Myers Squibb: Awaiting Key Alzheimer’s Trial Data
Analysts anticipate a modest upside for Bristol Myers Squibb this quarter. However, the spotlight remains on forthcoming Phase 3 trial data for Cobenfy, a schizophrenia medication being tested for Alzheimer’s disease psychosis. Schott highlights the potential for Cobenfy to become a multi-billion-dollar product if successful, with data expected by year-end. Meanwhile, sales growth for Cobenfy is predicted to be modest in the current quarter. Bristol Myers Squibb will also report earnings on Thursday.
Gilead: Strength in HIV Portfolio and New Prevention Therapies
Gilead’s core business is expected to show improvement, propelled by robust sales of HIV treatments Biktarvy and Descovy. The company’s recent launch of Yeztugo, a twice-yearly HIV prevention injection, will be closely monitored as it completes its first quarter on the market. Pricing impacts from the “most favored nation” policy under Medicaid are also anticipated to be a key topic during the earnings call. Despite Gilead’s higher Medicaid exposure compared to peers, analysts view the pricing challenges as manageable given existing discounts in this channel. Gilead’s earnings will be disclosed Thursday.
AbbVie: Rebound Expected with Strong Inflammatory and Aesthetics Sales
AbbVie is forecasted to deliver a solid quarter, bolstered by improvements in its aesthetics segment following prior weaknesses. Continued demand for Skyrizi and Rinvoq, treatments for inflammatory and autoimmune diseases, positions the company to potentially exceed Wall Street expectations and revise full-year guidance upward. AbbVie will release its earnings on Friday.
FinOracleAI — Market View
The upcoming earnings reports from Eli Lilly, Merck, Gilead, Bristol Myers Squibb, and AbbVie will provide critical insight into how major pharmaceutical companies are navigating regulatory pressures, competitive landscapes, and product life cycles. Key growth drivers include innovative therapies in immunotherapy, diabetes, weight management, HIV prevention, and autoimmune diseases.
- Opportunities: Expansion of novel drug launches, successful new indications (e.g., Cobenfy in Alzheimer’s psychosis), and sustained demand for blockbuster treatments.
- Risks: Political and regulatory uncertainties, pricing pressures from government policies, and revenue erosion from patent expirations.
- Market Dynamics: Shifting payer landscapes, including Medicaid impacts and competitive agreements affecting market access.
Impact: This earnings cycle is expected to reinforce confidence in the pharmaceutical sector’s resilience, with potential positive revisions to full-year outlooks for several key players, contingent on continued innovation and effective navigation of regulatory challenges.
