Global large pharmaceutical companies (big pharma) have been announcing their earnings for the first quarter of this year one after another. Big pharma has maintained growth centered around key medicines such as obesity treatments and anticancer drugs. However, increased pressures from U.S. President Donald Trump's transfer of production facilities and drug price reductions are increasing the volatility of global pharmaceutical companies' stock prices in the securities market.
◇Growth in obesity treatment shows the most significant performance increase
Among the earnings of global pharmaceutical companies for the first quarter of this year, the growth of new obesity drugs stands out. Currently, the global obesity treatment market is dominated by Denmark's Novo Nordisk and the U.S. company Eli Lilly, with both companies reporting increased sales of obesity drugs in the first quarter.
Eli Lilly's revenue for the first quarter was $12.7285 billion (about 18 trillion won), which is a 45% increase compared to the same period last year. The company noted that diabetes and obesity treatments have driven the growth in performance. Sales of the diabetes drug 'Mounjaro' increased by about 113% compared to the same period last year, reaching approximately 5 trillion won, while sales of the obesity drug 'Zepbound' surged by about 356% to around 3 trillion won. Currently, Eli Lilly (15th) is the only pharmaceutical corporation among the top 20 companies by market capitalization in the U.S. stock market.
Novo Nordisk's revenue for the first quarter increased by 19% compared to the same period last year, reaching 78.087 billion kroner (about 10.72 trillion won). The company's diabetes treatment 'Ozempic' saw an 18% increase in sales compared to the same period last year, and sales of the obesity drug 'Wegovy' increased by 85% compared to the same period last year, with total sales of diabetes and obesity drugs amounting to about 10 trillion won.
'Zepbound' and 'Wegovy' are both glucagon-like peptide (GLP)-1 receptor agonists that slow digestion and promote a feeling of fullness; they were initially developed as diabetes treatments but were advanced into obesity treatments after their weight loss side effects were confirmed.
◇Blockbuster drug patent expirations bring mixed fortunes
Anticancer drugs have traditionally driven the growth of global pharmaceutical companies. However, the expiration of patents has divided fortunes in performance.
The U.S. company Merck (MSD), the leading revenue generator in the anticancer drug market, reported first-quarter earnings of $7.205 billion (about 10 trillion won), an increase of 3.7% compared to the same period last year. While sales growth continued compared to the same period last year, it fell short of the $7.836 billion revenue in the fourth quarter of the previous year.
'Keytruda' is an immunotherapy that targets the PD-1 protein on the surface of T cells. This protein regulates the ability of T cells to attack normal cells, but cancer cells exploit this mechanism to evade the immune system. Keytruda blocks PD-1 to activate T cell immune function, helping them recognize and attack cancer cells. The patent for Keytruda is expected to expire in 2028 in Korea and the U.S., and in 2032 in Europe.
Merck is establishing a patent defense line. A representative effort is to develop Keytruda, currently an intravenous injection (IV) formulation, into a subcutaneous injection (SC) formulation. Once the development of the Keytruda SC formulation is completed, it could be protected by new patents until mid-2030. Merck aims to launch 'Keytruda SC' this year and to convert about 50% of its total Keytruda revenue to the SC formulation by 2028.
In contrast, U.S. company Bristol-Myers Squibb (BMS) saw first-quarter revenue decline by 6% to $11.2101 billion (about 15 trillion won) compared to the previous year. The company attributed the revenue decline to competition with generics. The expiration of patents for original anticancer drugs such as 'Revlimid,' 'Pomalyst,' 'Sprycel,' and 'Abraxane' has led to the entry of generics, capturing market share.
◇The fate of pharmaceutical stocks depends on Trump
Another point of interest is stock price volatility. Traditionally, announcements of clinical trial results were the biggest variables affecting pharmaceutical stock prices, but now President Trump is being identified as a variable shaking those prices.
An explicit example is when President Trump announced he would lower prescription drug prices in the U.S. to match those in other countries, causing stock prices of global pharmaceutical companies to drop across the board. On the 12th (local time), stock prices of European pharmaceutical companies such as Novo Nordisk, Britain’s AstraZeneca, and Switzerland’s Roche all fell. On that day, President Trump hinted he would sign an executive order that would include drug price reductions on his social media.
Stock prices for U.S. pharmaceutical companies including Eli Lilly, Pfizer, and BMS as well as MSD all dropped in pre-market trading on the New York Stock Exchange. Domestic companies like Samsung Biologics and Celltrion, which have significant U.S. export volumes, also saw their stock prices decline.
The U.S. administration has not yet specifically disclosed which medicines will be targeted for price reductions. President Trump has stated that he will announce tariffs on medicines within 2-3 weeks. This policy could directly impact the profitability of corporations, resulting in heightened volatility in stock prices.
Hyundai Securities researcher noted, "Due to the uncertainty around the Trump administration's drug price reductions and tariffs, and encouragement of domestic production, stock price volatility for healthcare sector corporations is widening," adding, "The stock price trend could vary depending on the announcements and subsequent measures taken by the Trump administration, so volatility is likely to continue for the time being."