Wrapping up Q2 earnings, we look at the numbers and key takeaways for the branded pharmaceuticals stocks, including Merck (NYSE: MRK) and its peers.
Looking ahead, the branded pharmaceutical industry is positioned for tailwinds from advancements in precision medicine, increasing adoption of AI to enhance drug development efficiency, and growing global demand for treatments addressing chronic and rare diseases. However, headwinds include heightened regulatory scrutiny, pricing pressures from governments and insurers, and the looming patent cliffs for key blockbuster drugs. Patent cliffs bring about competition from generics, forcing branded pharmaceutical companies back to the drawing board to find the next big thing.
The 10 branded pharmaceuticals stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 3.1%.
In light of this news, share prices of the companies have held steady as they are up 4.4% on average since the latest earnings results.
Merck (NYSE: MRK)
With roots dating back to 1891 and a portfolio that includes the blockbuster cancer immunotherapy Keytruda, Merck (NYSE: MRK) develops and sells prescription medicines, vaccines, and animal health products across oncology, infectious diseases, cardiovascular, and other therapeutic areas.
Merck reported revenues of $15.81 billion, down 1.9% year on year. This print fell short of analysts’ expectations by 1.1%. Overall, it was a mixed quarter for the company with an impressive beat of analysts’ constant currency revenue estimates but full-year revenue guidance meeting analysts’ expectations.
"Earlier this month, we were pleased to announce our pending acquisition of Verona Pharma, which augments our portfolio and pipeline and is another example of acting decisively when science and value align,” said Robert M. Davis, chairman and chief executive officer.
Merck delivered the slowest revenue growth of the whole group. Unsurprisingly, the stock is down 1.3% since reporting and currently trades at $82.96.
Is now the time to buy Merck? Access our full analysis of the earnings results here, it’s free.
Best Q2: Supernus Pharmaceuticals (NASDAQ: SUPN)
With a diverse portfolio of eight FDA-approved medications targeting neurological conditions, Supernus Pharmaceuticals (NASDAQ: SUPN) develops and markets treatments for central nervous system disorders including epilepsy, ADHD, Parkinson's disease, and migraine.
Supernus Pharmaceuticals reported revenues of $165.5 million, down 1.7% year on year, outperforming analysts’ expectations by 7.4%. The business had an incredible quarter with a beat of analysts’ EPS estimates and full-year operating income guidance exceeding analysts’ expectations.
Supernus Pharmaceuticals scored the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 12.9% since reporting. It currently trades at $42.37.
Is now the time to buy Supernus Pharmaceuticals? Access our full analysis of the earnings results here, it’s free.
Corcept (NASDAQ: CORT)
Focusing on the powerful stress hormone that affects everything from metabolism to immune function, Corcept Therapeutics (NASDAQ: CORT) develops and markets medications that modulate cortisol to treat endocrine disorders, cancer, and neurological diseases.
Corcept reported revenues of $194.4 million, up 18.7% year on year, falling short of analysts’ expectations by 3.5%. It was a softer quarter as it posted full-year revenue guidance missing analysts’ expectations.
Corcept delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. Interestingly, the stock is up 8.9% since the results and currently trades at $72.93.
Read our full analysis of Corcept’s results here.
Royalty Pharma (NASDAQ: RPRX)
Pioneering a unique business model in the pharmaceutical industry since 1996, Royalty Pharma (NASDAQ: RPRX) acquires rights to receive portions of sales from successful biopharmaceutical products, providing funding to drug developers without conducting research itself.
Royalty Pharma reported revenues of $578.7 million, up 7.7% year on year. This result lagged analysts' expectations by 1.9%. Overall, it was a slower quarter for the company.
The stock is down 3.7% since reporting and currently trades at $36.51.
Read our full, actionable report on Royalty Pharma here, it’s free.
Zoetis (NYSE: ZTS)
Originally spun off from Pfizer in 2013 as the world's largest pure-play animal health company, Zoetis (NYSE: ZTS) discovers, develops, and sells medicines, vaccines, diagnostic products, and services for pets and livestock animals worldwide.
Zoetis reported revenues of $2.46 billion, up 4.2% year on year. This number beat analysts’ expectations by 1.9%. It was a strong quarter as it also put up a solid beat of analysts’ constant currency revenue estimates and a beat of analysts’ EPS estimates.
The stock is up 1.8% since reporting and currently trades at $154.78.
Read our full, actionable report on Zoetis here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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