Earnings preview for Eli Lilly, Merck, Gilead and AbbVie

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The pharmaceutical industry has kicked off its third quarter earnings and we're here to give you a preview of the biggest names reporting this week.

It has been a tumultuous year for pharmaceutical companies. They have had to navigate the Trump administration's rapidly changing drug pricing policies, threats of pharmaceutical tariffs, pressure to increase manufacturing in the United States, and Health and Human Services Secretary Robert F. Kennedy Jr.'s sweeping overhaul of federal health agencies, among other issues.

Most important for investors is any details on potential “most favored nation” drug pricing agreements with President Donald Trump, following the administration's recent agreements with Pfizer, AstraZeneca and EMD Serono, the world's largest maker of fertility drugs, that aim to make it easier for Americans to access their drugs. In addition to political uncertainty, several companies are rushing to compensate for the loss of income derived from products that will lose their exclusivity in the market.

Here's what to look out for in reports from some major pharmaceutical companies this week:

• merck – Don't expect “big surprises” this quarter for the company, according to an October note from JPMorgan analyst Chris Schott. It anticipates revenue growth will come from sustained demand for Keytruda immunotherapy, 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 and deadly lung disease, and Capvaxive, a vaccine designed to protect adults from a bacteria known as pneumococcus that can cause serious illness and lung infections. But Schott said the growth could be partially offset by weak sales in China of Gardasil, a vaccine that prevents HPV cancer, the most common sexually transmitted infection in the United States. Merck will report its results on Thursday.
• Eli Lilly – In a separate October note, Schott said he expects “strong results” from the company due to underlying growth from its blockbuster diabetes injection Mounjaro and weight loss drug Zepbound. He said he wouldn't be surprised if Eli Lilly raises 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 notice that the impact of a deal between Nordisk and CVS “It has been digested,” Scala said. Under that deal announced in May, CVS boosted access to Novo Nordisk's Wegovy weight loss treatment for patients on its medication plans and eliminated Zepbound. Eli Lilly will also release its results on Thursday.
• Bristol-Myers Squibb – Schott expects a “modest improvement” for the company this quarter, according to another note from October. But all eyes will be on upcoming data from a phase three trial of Cobenfy, a relatively new schizophrenia drug, in Alzheimer's disease psychosis. Schott said he expects the data, which could be released by the end of the year, to dominate the near-term outlook for Bristol Myers Squibb. Alzheimer's psychosis could be a “billion-dollar peak sales opportunity” for the drug, according to Schott. In a separate note, Scala said it expects Cobenfy sales to increase “modestly” in the third quarter. Bristol Myers Squibb will report its results on Thursday.
• Gilead – The company's core business could show improvement during the third quarter, driven by the strength of its HIV business, Schott said in another October note. He expects continued growth from two HIV drugs called Biktarvy and Descovy. Schott will be watching for updates on the launch of Gilead's biannual HIV prevention injection, Yeztugo, which concluded its first quarter on the market. Schott said he believes Trump's most favored nation policy, which impacts pricing in the Medicaid market, will also be a focus of the earnings call. Gilead has greater exposure to Medicaid as a percentage of global sales compared to peers, but “we view this as ultimately manageable” for the company since drugs in Medicaid are already offered at a discount in other U.S. channels, according to Schott. Gilead will also report its results on Thursday.
• abbvie – In an October note, Scala said it expects a “typical, strong quarter” from the drugmaker, with improvements in its aesthetics business after weakness in recent quarters. Abbvie has seen continued strength in Skyrizi and Rinvoq, drugs used to treat various inflammatory and autoimmune conditions, according to a note from Schott in October. 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 cover some of these names later this week and others in the coming weeks, so stay tuned for our coverage.

Feel free to send any tips, suggestions, story ideas and facts to Annika at a new email: [email protected].