Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Eli Lilly (NYSE: LLY) and the best and worst performers in the branded pharmaceuticals industry.
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%.
Thankfully, share prices of the companies have been resilient as they are up 6.2% on average since the latest earnings results.
Eli Lilly (NYSE: LLY)
Founded in 1876 by a Civil War veteran and pharmacist frustrated with the poor quality of medicines, Eli Lilly (NYSE: LLY) discovers, develops, and manufactures pharmaceutical products for conditions including diabetes, obesity, cancer, immunological disorders, and neurological diseases.
Eli Lilly reported revenues of $15.56 billion, up 37.6% year on year. This print exceeded analysts’ expectations by 5.4%. Overall, it was a very strong quarter for the company with a beat of analysts’ EPS estimates and full-year revenue guidance slightly topping analysts’ expectations.
"Lilly delivered another quarter of strong performance, achieving 38% year-over-year revenue growth driven by robust sales of Zepbound and Mounjaro and sustained momentum across our key medicines," said David A. Ricks, Lilly chair and CEO.
Eli Lilly achieved the fastest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 2.8% since reporting and currently trades at $726.50.
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 22.6% since reporting. It currently trades at $46.
Is now the time to buy Supernus Pharmaceuticals? Access our full analysis of the earnings results here, it’s free.
Slowest Q2: 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 3.4% since the results and currently trades at $69.30.
Read our full analysis of Corcept’s results here.
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 print topped analysts’ expectations by 1.9%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ constant currency revenue estimates and a beat of analysts’ EPS estimates.
The stock is flat since reporting and currently trades at $150.50.
Read our full, actionable report on Zoetis here, it’s free.
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 number came in 1.9% below analysts' expectations. Overall, it was a slower quarter for the company.
The stock is down 5% since reporting and currently trades at $36.01.
Read our full, actionable report on Royalty Pharma here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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