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The first-quarter earnings season for the drug and biotech sector will be in full swing this week, with many large drugmakers like Pfizer PFE, Eli Lilly LLY, Amgen AMGN, Biogen BIIB, and Regeneron Pharmaceuticals REGN, among others, due to announce results. Johnson & Johnson and Merck have already reported results, with both beating first-quarter estimates for earnings and sales. French drugmaker Sanofi came out with mixed first-quarter results as it beat estimates for earnings but missed the same for sales.
(Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)
Per the Zacks classification, the pharma/biotech industry falls under the broader Medical sector, comprising pharma/biotech and generic companies, and medical device companies.
Per the Earnings Trends report, as of April 23, 15% of the companies in the Medical sector — representing 33.8% of the sector’s market capitalization — reported quarterly earnings. Out of these, 77.8% surpassed estimates for both earnings and revenues. Earnings increased 4.7% year over year, while revenues rose 9.4%. Overall, first-quarter earnings of the Medical sector are expected to increase 35%, while sales are projected to rise 7.8% from the year-ago quarter.
Let’s see how things have shaped up for these companies ahead of their earnings announcements.
PFE’s performance has been solid, with the company exceeding earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 44.16%, on average. In the last reported quarter, the company delivered an earnings surprise of 31.25%.
PFE has an Earnings ESP of -2.34% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for first-quarter sales and earnings stands at $13.88 billion and 64 cents per share, respectively.
Per our proven model, companies with the combination of a positive Earnings ESP and a Zacks Rank #1, #2 or #3 (Hold) have a good chance of delivering an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Pfizer’s non-COVID operational revenues have been driving its top-line growth, backed by its key in-line products like Vyndaqel, Padcev and Eliquis, new launches and newly acquired products from Seagen. Though sales of PFE’s COVID products, Comirnaty and Paxlovid, declined in the past few quarters, it seems that sales have stabilized somewhat.
PFE is scheduled to report first-quarter results on April 29, before the opening bell.
Pfizer Inc. price-eps-surprise | Pfizer Inc. Quote
LLY’s performance has been mixed so far. The company exceeded earnings expectations in three of the trailing four quarters and missed the same on the remaining occasion. It delivered a four-quarter earnings surprise of 8.47%, on average. In the last reported quarter, the company delivered an earnings surprise of 5.77%.
Lilly has an Earnings ESP of -14.61% and a Zacks Rank #3. The Zacks Consensus Estimate for sales and earnings is pegged at $12.62 billion and $3.52 per share, respectively.
In the first quarter, top-line growth is expected to have been driven by demand growth for Lilly’s FDA-approved tirzepatide medicines, diabetes drug Mounjaro and weight loss medicine, Zepbound.
Sales of Mounjaro and Zepbound were below expectations in the second half of 2024 due to slower-than-expected growth and unfavorable channel dynamics.
In February, the company had said it was hopeful that sales of Mounjaro and Zepbound would pick up in 2025, backed by the launch of the drugs in new international markets and ramped up manufacturing in the first half of the year. It remains to be seen if sales of Mounjaro and Zepbound improved in the first quarter.
LLY is scheduled to report first-quarter results on May 1, before the opening bell.
Eli Lilly and Company price-eps-surprise | Eli Lilly and Company Quote
AMGN’s performance has been strong, with earnings beating estimates in each of the trailing four quarters. The company delivered a four-quarter earnings surprise of 5.23%, on average. In the last reported quarter, the company delivered an earnings surprise of 5.57%.
AMGN has an Earnings ESP of -0.05% and a Zacks Rank #3. The Zacks Consensus Estimate for sales and earnings for the first quarter is pegged at $7.96 billion and $4.15 per share, respectively.
Amgen’s product sales in the first quarter are expected to have been driven by strong volume growth of products like Evenity, Repatha, Kyprolis and Blincyto, among others. However, prices of most products are expected to continue to decline due to higher rebates to support expanded access.
AMGN is scheduled to report first-quarter results on May 1, after market close.
Amgen Inc. price-eps-surprise | Amgen Inc. Quote
BIIB’s performance has been strong, with earnings beating estimates in each of the trailing four quarters. The company delivered a four-quarter earnings surprise of 11.80%, on average. In the last reported quarter, BIIB delivered an earnings surprise of 0.58%.
BIIB has an Earnings ESP of -2.70% and a Zacks Rank #3. The Zacks Consensus Estimate for sales and earnings for the first quarter is pegged at $2.23 billion and $3.52 per share, respectively.
In the first quarter, lower sales of multiple sclerosis (“MS”) drugs are likely to have been offset by revenues from new drugs. Sales of Biogen’s MS drugs like Tecfidera and Tysabri are likely to have declined amid rising competitive pressure in the market.
Sales of Biogen’s spinal muscular atrophy drug, Spinraza, improved in the fourth quarter due to higher sales in the United States, as higher pricing offset the negative impact of a decrease in demand. We believe that decreased demand amid competitive pressure is likely to have hurt sales in the United States in the first quarter,too.
BIIB is scheduled to report first-quarter results on May 1, before the opening bell.
Biogen Inc. price-eps-surprise | Biogen Inc. Quote
REGN’s performance has been mixed so far. The company surpassed earnings expectations in three of the trailing four quarters and missed the same on the remaining occasion. It delivered a four-quarter earnings surprise of 3.23%, on average. In the last reported quarter, the company delivered an earnings surprise of 3.87%.
REGN has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). The Zacks Consensus Estimate for first-quarter sales and earnings is pegged at $3.28 billion and $8.43 per share, respectively.
Sales of Regeneron’s lead drug, Eylea, which is approved for various ophthalmology indications, are likely to have declined in the first quarter owing to competition from Vabysmo.
To counter the decline in Eylea sales, Regeneron developed a higher dose of the drug called Eylea HD. Sales of Eylea HD are likely to have surged in the to-be-reported quarter on strong demand.
Also, profits from the sales of the asthma drug Dupixent are one of the key growth drivers for REGN. Dupixent sales are likely to have surged in the first quarter, driven by continued strong prescription trends across all indications.
REGN is scheduled to report first-quarter results on April 29, before the opening bell.
Regeneron Pharmaceuticals, Inc. price-eps-surprise | Regeneron Pharmaceuticals, Inc. Quote
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This article originally published on Zacks Investment Research (zacks.com).
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