Eli Lilly, Merck, Gilead and AbbVie earnings preview

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

It has been a tumultuous 12 months for drugmakers. They’ve needed 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, amongst 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 most important fertility drug manufacturer on this planet, that aim to make their medicines easier for Americans to access. On top of political uncertainty, several firms are racing to offset the loss in revenue from products set to lose their exclusivity in the marketplace. 

Here’s what to look out for from a number of major pharmaceutical firms reporting this week: 

• Merck – Expect no “major surprises” this quarter for the corporate, based on an October note from JPMorgan analyst Chris Schott. He anticipates topline growth will come from sustained demand for immunotherapy Keytruda, together with Merck’s animal health business, with increased contributions from recent and up to date drug launches. That features Winrevair, which is used to treat a rare, deadly lung condition, and Capvaxive, a vaccine designed to guard adults from a bacteria often known as pneumococcus that could cause serious illnesses and lung infection. But Schott said growth may very well be partially offset by trouble sluggish China sales of Gardasil, a vaccine that stops cancer from HPV, essentially the most common sexually transmitted infection within the U.S. Merck will report earnings on Thursday. 
• Eli Lilly – In a separate October note, Schott said he expects “strong results” from the corporate because of the underlying growth of its blockbuster diabetes injection Mounjaro and weight reduction drug Zepbound. He said he wouldn’t be surprised if Eli Lilly hikes its full-year guidance again due to demand for those two drugs. In one other 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 reduction treatment Wegovy for patients on its drug plans and dropped Zepbound. Eli Lilly may even post earnings on Thursday.
• Bristol Myers Squibb – Schott expects “modest upside” from the corporate this quarter, based on a separate October note. But all eyes will probably be on upcoming data from a phase three trial on Cobenfy, a comparatively recent 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 may very well be a “multi-billion-dollar peak sales opportunity” for the drug, based on Schott. In a separate note, Scala said he expects Cobenfy sales to be up “modestly” within the third quarter. Bristol Myers Squibb will report earnings Thursday. 
• Gilead – The corporate’s core business could show improvement in the course of the third quarter, driven by strength from its HIV business, Schott said in one other October note. He expects continued growth for 2 HIV medications called Biktarvy and Descovy. Schott will probably be listening for updates across the launch of Gilead’s twice-yearly HIV prevention injection, Yeztugo, which wrapped up its first quarter in the marketplace. Schott said he believes Trump’s most favored nation policy, which impacts pricing on the Medicaid market, may even be a spotlight of the earnings call. Gilead has the next exposure to Medicaid as a percentage of world sales in comparison with its peers, but “we see this as being ultimately manageable” for the corporate since drugs on Medicaid are already offered at a reduction to other U.S. channels, based on Schott. Gilead may even 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, based on an October note from Schott. He said it positions the corporate to beat Wall Street’s expectations for the quarter and lift its full-year guidance. AbbVie will report earnings on Friday. 

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

Be happy to send any suggestions, suggestions, story ideas and data to Annika at a brand new email: annika.constantino@versantmedia.com.