- Shares of Pfizer and Merck rose after reporting financial results that beat expectations.
- Eli Lilly dropped on earnings that topped profit expectations, but missed on revenue.
Shares of pharmaceutical giants Pfizer PFE and Merck MRK rose more than 1% in premarket trading on Tuesday after reporting first-quarter financial results that beat Wall Street's expectations.
However, shares of drug giant Eli Lilly LLY dropped 3.0% after releasing first-quarter earnings that topped profit expectations, but missed on revenue. Sales of two of Eli Lilly's key drugs, Trulicity and Alimta, fell short of Wall Street's forecasts. Merck's earnings got a slight lift from sales of vaccines amid the worst measles outbreak since the disease was eradicated from the U.S. and cancer immunotherapy drug Keytruda.
Health care has been the worst-performing sector in the stock market this year on concerns of drug price reform and "Medicare for All" proposals from Democratic lawmakers. The Health Care Select Sector SPDR Fund, an ETF that tracks the health-care industry's biggest companies, has risen by just 2.7% as of Monday, significantly lagging the broader market indexes. The Dow Jones Industrial Average is up 13% over the same period, and the S&P 500 is 17% higher.
Eli Lilly said it expects further price declines in the United States this year as well as increased competition from generics, including for erectile dysfunction drug Cialis.
Trulicity, the company's top-selling drug, brought in $879.7 million in the quarter, an increase of 30% compared with the first quarter of 2018.
The U.S. drugmaker now expects full-year revenue between $22 billion and $22.5 billion, lower than a previous forecast of of $25.1 billion to $25.6 billion. However, it raised its adjusted full-year earnings forecast by 5 cents to $5.60 to $5.70 per share.
Eli Lilly has been facing pressure from Congress to lower prescription drug costs. In March, the company disclosed for the first time what it charges wholesalers versus what many patients typically pay. It also announced plans to sell a half-price version of insulin injection Humalog .
The company reported first-quarter earnings of $1.22 per share, beating the analysts' expectations of $1.06 a share. Revenue came in at $10.81 billion, beating estimates of $10.48 billion.
Merck said sales of Keytruda surged 55% in the quarter to $2.27 billion. Keytruda, which boosts the immune system to attack cancer, has driven growth for Merck and put pressure on Bristol-Myers Squibb's rival drug Opdivo.
Merck's Gardasil vaccine to prevent certain types of cancer also had a good quarter with sales up 27 percent to $838 million. Sales of children vaccines, which includes the company's MMR vaccine for measles, jumped 27% to $496 million.
The drug giant raised its earnings guidance for the year. It now expects full-year adjusted earnings per share between $4.67 and $4.79. That's higher than its prior forecast of $4.57 to $4.72.
Pfizer earned 85 cents per share in the first quarter, beating Wall Street estimates by 10 cents. The company reported revenue of $13.12 billion, higher than the $12.99 billion forecast.
CEO Albert Bourla, who succeeded Ian Read on Jan. 1, shuffled the company's senior management team last year and is leading the efforts to restructure the pharmaceutical giant into a more nimble company. The company has been trying to bulk up its pipeline of drugs and therapies, especially in oncology, ahead of impending patent expirations.
The New York-based drug company also raised its earnings per share forecast by a cent. It now expects between $2.83 to $2.93 per share.
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