Wrapping up Q1 earnings, we look at the numbers and key takeaways for the branded pharmaceuticals stocks, including Organon (NYSE: OGN) and its peers.

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 satisfactory Q1. As a group, revenues were in line with analysts’ consensus estimates.

While some branded pharmaceuticals stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.1% since the latest earnings results.

Organon (NYSE: OGN)

Spun off from Merck in 2021 to create a company dedicated to addressing unmet needs in women's health, Organon (NYSE: OGN) is a global healthcare company focused on improving women's health through prescription therapies, medical devices, biosimilars, and established medicines.

Organon reported revenues of $1.51 billion, down 6.7% year on year. This print exceeded analysts’ expectations by 0.6%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EPS estimates.

“We have reset our capital allocation priorities to accelerate progress towards deleveraging, enabling a path to achieve a net leverage ratio of below 4.0x by year-end. Over the last year, we have established a leaner, more fit-for-purpose cost structure while increasing revenue contribution from our core growth drivers. By deleveraging more rapidly, we will continue to strengthen the future prospects of the company. Over time, this will position us to execute more of the compelling business development we’ve done to date, bringing in additional growth drivers to our portfolio, while maintaining lower leverage,” said Kevin Ali, Organon’s CEO.

Unsurprisingly, the stock is down 24.3% since reporting and currently trades at $9.77.

Is now the time to buy Organon? Access our full analysis of the earnings results here, it’s free.

Best Q1: Bristol-Myers Squibb (NYSE: BMY)

With roots dating back to 1887 and a transformative merger in 1989 that gave the company its current name, Bristol-Myers Squibb (NYSE: BMY) discovers, develops, and markets prescription medications for serious diseases including cancer, blood disorders, immunological conditions, and cardiovascular diseases.

Bristol-Myers Squibb reported revenues of $11.2 billion, down 5.6% year on year, outperforming analysts’ expectations by 3.9%. The business had a very strong quarter with a solid beat of analysts’ EPS estimates and full-year revenue guidance slightly topping analysts’ expectations.

Bristol-Myers Squibb delivered the biggest analyst estimates beat among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $48.05.

Is now the time to buy Bristol-Myers Squibb? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: 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 $12.73 billion, up 45.2% year on year, exceeding analysts’ expectations by 0.9%. Still, it was a slower quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates and a miss of analysts’ EPS estimates.

As expected, the stock is down 14.8% since the results and currently trades at $763.27.

Read our full analysis of Eli Lilly’s results here.

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 $568.2 million, flat year on year. This result was in line with analysts’ expectations. Overall, it was a satisfactory quarter as it also logged a solid beat of analysts’ EPS estimates.

The stock is up 7.3% since reporting and currently trades at $35.20.

Read our full, actionable report on Royalty Pharma here, it’s free.

Collegium Pharmaceutical (NASDAQ: COLL)

Pioneering abuse-deterrent technology in a field plagued by addiction concerns, Collegium Pharmaceutical (NASDAQ: COLL) develops and markets specialty medications for treating moderate to severe pain, including abuse-deterrent opioid formulations.

Collegium Pharmaceutical reported revenues of $177.8 million, up 22.7% year on year. This print beat analysts’ expectations by 2.3%. It was a satisfactory quarter as it also recorded a decent beat of analysts’ EPS estimates.

The stock is up 18.3% since reporting and currently trades at $32.26.

Read our full, actionable report on Collegium Pharmaceutical here, it’s free.

Market Update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

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