It’s been a tough year for the stocks of most U.S. drugmakers. While the broader S&P 500 has climbed roughly 16% from the start of 2023 through Tuesday morning, shares of big pharma stalwarts like
Pfizer
and
Bristol Myers Squibb
are down on the year.
Biotech stocks are continuing their multiyear slump, and makers of generic drugs are struggling, too.
A few select names, however, have been doing particularly well; some are even outperforming the
S&P 500.
For investors, tracking the pharmaceutical and life sciences stocks that are up in what has otherwise been a grim year for drugmakers can help identify trends in the market.
We screened the
S&P 500 Pharmaceuticals Biotechnology & Life Sciences
industry group index, which is up 0.9% this year as of early Tuesday, for constituents whose share prices are up at least 5% over the same period.
Of the 29 stocks in the index, six passed the screen:
West Pharmaceutical Services
(ticker: WST),
Eli Lilly
(LLY),
Zoetis
(ZTS),
Vertex Pharmaceuticals
(VRTX),
Regeneron Pharmaceuticals
(REGN), and
IQVIA Holdings
(IQV). For the top two performers, the story is the same: They are up because of the extraordinary burst of investor excitement over the new weight loss drugs known as GLP-1 receptor agonists.
| Company / Ticker | Recent price | Price change (YTD) | Market value (bil) |
|---|---|---|---|
| West Pharmaceutical Services / WST | $399.89 | 69.9% | $29.5 |
| Eli Lilly / LLY | 538.00 | 47.1 | 510.7 |
| Zoetis / ZTS | 189.65 | 29.4 | 87.3 |
| Vertex Pharmaceuticals / VRTX | 349.37 | 21.0 | 90.2 |
| Regeneron Pharmaceuticals / REGN | 808.38 | 12.0 | 87.7 |
| IQVIA Holdings / IQV | 220.12 | 7.4 | 40.3 |
Source: FactSet
Lilly, which makes the most promising of the GLP-1 receptor agonists, is up 47.1% as of early Tuesday, and now has a market value that tops $500 billion, making it the most valuable pharmaceutical company in history. Its diabetes drug Mounjaro is widely expected to receive Food and Drug Administration approval as a weight-loss treatment by the end of the year, and to break single-year sales records for any medicine in history before the end of the decade.
West has also benefited from the enthusiasm for Lilly’s medicine. A contract manufacturer, West makes the delivery devices that patients use to inject medicines like the GLP-1s. As demand for those medicines explodes, the thinking goes, so will West’s sales.
Also beating the broader S&P 500 this year are the animal health company Zoetis, which is preparing to launch a new pain medicine for dogs later this year called Librela, and Vertex, which is developing a non-opioid pain reliever that has grabbed investor interest.
The biotech Regeneron and IQVIA, which, runs clinical trials for drugmakers, are both up on the year, though both trail the S&P 500.
In the healthcare sector, investors seem unwilling to get excited about more than one thing at once. For now, it’s the weight-loss drugs and not much more.
Write to Josh Nathan-Kazis at [email protected]
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