Blockbuster drug sales power Big Pharma’s Q3 earnings as tariff fears fade

Drug sales, driven by blockbuster weight-loss and diabetes drugs, continued to impress Wall Street this earnings season as the pharmaceutical industry’s tariff fears start to fade.

Most major drugmakers reported earnings that beat the Street’s estimates, while tariffs seemed to be an afterthought. All the while, a bitter bid-off between two major players escalated as the reports rolled in.

This quarter solidified Eli Lilly’s dominance in the GLP-1 market. The company’s blockbuster diabetes and weight-loss medication, tirzepatide, which is sold under the brand names Mounjaro and Zepbound, was the most sold drug in the world this quarter — by a lot. The company reported earnings and sales that beat estimates.

“Of course, everybody would like to be in our position, but we’re focused on defending it and mostly just executing the play we have,” Lilly CEO David Ricks told analysts last week.

Novo Nordisk, which was first to the GLP-1 game, appears to have lost its thunder. Sales of the company’s diabetes and weight-loss shot — semaglutide, which is sold under the brand names Ozempic and Wegovy — were flat quarter over quarter and about $2 billion less than Lilly’s competing shot. Novo reported earnings and sales that missed Wall Street estimates and lowered its guidance.

Meanwhile, pharma’s most lucrative frontier turned into a full-blown corporate drama.

Pfizer launched a legal battle this week against Novo for seeking to intercept its acquisition bid for Metsera, an obesity biotech working on a next-generation GLP-1 drug. Metsera said on Monday that both Novo and Pfizer had sweetened their bids for the company, but Novo’s was still superior to Pfizer’s. Novo’s bid is worth up to $10 billion, while Pfizer’s is worth up to $8.1 billion.

On Pfizer’s Tuesday earnings call, CEO Albert Bourla said Novo’s goal is not to develop Metsera’s products but to prevent them from reaching the market. “What they want is to cut and kill an emerging competitor,” he said. (Pfizer, which tried and failed to make its own obesity drug, reported earnings that beat expectations.)

Tariffs on pharmaceuticals, which have rattled drugmakers’ stocks this year, have now taken a back seat as the administration’s policy stance takes shape.

In September, Pfizer secured a three-year grace period from tariffs by committing to investing in US manufacturing and agreeing to sell its drugs at a discount to the government and through direct-to-consumer channels. Considering most Big Pharma companies have announced US investments this year and offer a DTC option on some drugs, it gave a clear pathway for drugmakers to strike similar deals.

The word “tariff” went largely unmentioned on drug companies’ earnings calls, especially compared to the last two quarters.

Merck, for one, said its 2025 outlook includes less than $100 million in costs related to tariffs. The company reported profits that beat estimates but sales that disappointed, including for its blockbuster cancer treatment, Keytruda.

Gilead — which unlike most of its peers, predominantly manufactures in the US — reported earnings and sales that beat Wall Street estimates, though its stock still took a dip on signs of cracks in the HIV drug business.

“We continue to expect the impact of known tariffs to be manageable in 2025,” Gilead’s chief financial officer, Andrew D. Dickinson, told analysts on October 30.