Healthy Returns: What to expect from Eli Lilly, Merck, Gilead and AbbVie third-quarter earnings

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The pharmaceutical industry has kicked off third-quarter earnings, and we’re here to give you a preview of the biggest names set to report this week. 

It’s been a tumultuous year for drugmakers. They have had to navigate the Trump administration’s rapidly changing drug pricing policies, threats of pharmaceutical tariffs, pressure to ramp up U.S. manufacturing and Health and Human Services Secretary Robert F. Kennedy Jr.’s massive overhaul of federal health agencies, among other issues.  

Top of mind for investors is any details on potential “most favored nation” drug pricing deals with President Donald Trump, following the administration’s recent agreements with Pfizer, AstraZeneca and EMD Serono, the largest fertility drug manufacturer in the world, that aim to make their medicines easier for Americans to access. On top of political uncertainty, several companies are racing to offset the loss in revenue from products set to lose their exclusivity on the market. 

Here’s what to look out for from a few major pharmaceutical companies reporting this week: 

• Merck – Expect no “major surprises” this quarter for the company, according to an October note from JPMorgan analyst Chris Schott. He anticipates topline growth will come from sustained demand for immunotherapy Keytruda, along with Merck’s animal health business, with increased contributions from new and recent drug launches. That includes Winrevair, which is used to treat a rare, deadly lung condition, and Capvaxive, a vaccine designed to protect adults from a bacteria known as pneumococcus that can cause serious illnesses and lung infection. But Schott said growth could be partially offset by trouble sluggish China sales of Gardasil, a vaccine that prevents cancer from HPV, the most common sexually transmitted infection in the U.S. Merck will report earnings on Thursday. 
• Eli Lilly – In a separate October note, Schott said he expects “strong results” from the company due to the underlying growth of its blockbuster diabetes injection Mounjaro and weight loss drug Zepbound. He said he would not be surprised if Eli Lilly hikes its full-year guidance again because of demand for those two drugs. In another note, TD Cowen analyst Steve Scala said he doesn’t expect any surprises. Eli Lilly may note that the impact of a deal between Novo Nordisk and CVS “has been digested,” Scala said. Under that deal announced in May, CVS boosted access to Novo Nordisk’s weight loss treatment Wegovy for patients on its drug plans and dropped Zepbound. Eli Lilly will also post earnings on Thursday.
• Bristol Myers Squibb – Schott expects “modest upside” from the company this quarter, according to a separate October note. But all eyes will be on upcoming data from a phase three trial on Cobenfy, a relatively new schizophrenia drug, in Alzheimer’s disease psychosis. Schott said he expects that data, which could come by year-end, to dominate the near-term outlook for Bristol Myers Squibb. Alzheimer’s psychosis could be a “multi-billion-dollar peak sales opportunity” for the drug, according to Schott. In a separate note, Scala said he expects Cobenfy sales to be up “modestly” in the third quarter. Bristol Myers Squibb will report earnings Thursday. 
• Gilead – The company’s core business could show improvement during the third quarter, driven by strength from its HIV business, Schott said in another October note. He expects continued growth for two HIV medications called Biktarvy and Descovy. Schott will be listening for updates around the launch of Gilead’s twice-yearly HIV prevention injection, Yeztugo, which wrapped up its first quarter on the market. Schott said he believes Trump’s most favored nation policy, which impacts pricing on the Medicaid market, will also be a focus of the earnings call. Gilead has a higher exposure to Medicaid as a percentage of global sales compared to its peers, but “we see this as being ultimately manageable” for the company since drugs on Medicaid are already offered at a discount to other U.S. channels, according to Schott. Gilead will also report earnings on Thursday.
• AbbVie – In an October note, Scala said he expects a “typical, solid quarter” from the drugmaker, with improvements in its aesthetics business after weakness in recent quarters. Abbvie has seen continued strength in Skyrizi and Rinvoq, medicines used to treat various inflammatory and autoimmune conditions, according to an October note from Schott. He said it positions the company to beat Wall Street’s expectations for the quarter and raise its full-year guidance. AbbVie will report earnings on Friday. 

We’ll be covering some of these names later this week and others in the weeks ahead, so stay tuned for our coverage. 

Feel free to send any tips, suggestions, story ideas and data to Annika at a new email: annika.constantino@versantmedia.com.