The recent U.S. stock earnings season coincides with the release of full-year 2025 performance forecasts by some pharmaceutical companies listed in A-shares and Hong Kong stocks. Here is a summary of the latest results from major pharmaceutical giants, revealing potential investment insights hidden within these financial reports.
U.S. Earnings Season: Weight-Loss Drug Boom and Traditional Giants' Challenges
1. Eli Lilly Q4 revenue reached $19.3 billion, a 43% year-over-year increase; non-GAAP earnings per share were $7.54, up 42%. Prescriptions for its weight-loss drug Zepbound have surpassed Novo Nordisk's Wegovy. The company's 2026 revenue guidance of $800–830 billion far exceeds market expectations, projecting growth of up to 27%.
2. Novo Nordisk Sales of semaglutide (Ozempic/Wegovy) reached $34.608 billion in 2025, surpassing Merck's Keytruda for the first time and contributing 73.9% of the company's total revenue. In China, sales of the diabetes injection Ozempic amounted to approximately ¥5.932 billion, while the weight-loss version Wegovy generated around ¥874 million in sales. The oral Wegovy tablet launched in the U.S. on January 5, 2026, with weekly prescriptions reaching about 50,000 by January 23. Within less than a month, approximately 170,000 people received prescriptions, described by the CEO as "one of the most successful launches in the pharmaceutical industry." The company expects 2026 sales to decline by 5% to 13%, significantly worse than the market's forecast of -1.4%, mainly due to pricing pressures and intensified competition in the U.S.
3. Merck Sales of Keytruda (pembrolizumab) reached $31.68 billion for the year, a 7% increase, accounting for nearly 50% of the company's total revenue. Sales of the new pulmonary hypertension drug Winrevair reached $1.443 billion for the year, more than tripling compared to 2024. Sales of the new chronic obstructive pulmonary disease drug Ohtuvayre reached $178 million in Q4, exceeding expectations. In 2025, the company completed acquisitions of Verona Pharma and Cidara Therapeutics, strengthening its pipeline in respiratory and infectious diseases. For 2026 guidance, the company expects full-year sales of $65.5–67 billion, falling short of the market's estimate of $67.5 billion. Adjusted EPS guidance of $5.00–5.15 is below Wall Street's expectation of $8–9, primarily due to one-time expenses from the Cidara acquisition.
4. Johnson & Johnson Q4 2025 revenue was $24.56 billion, exceeding expectations, with the innovative pharmaceuticals division sales growing by 10%. The 2026 sales guidance of $99.5–100.5 billion and EPS outlook remain above expectations, despite U.S. pricing pressures and increased competition.
5. Pfizer Q4 revenue was $17.6 billion, with a 9% increase excluding COVID-19 products. Non-COVID core business grew 6% for the full year. The 2026 revenue guidance of $59.5–62.5 billion is relatively conservative, reflecting declining COVID-19 product revenue and patent expirations for some drugs.
6. Sanofi Q4 profits exceeded expectations, with blockbuster product Dupixent achieving record sales of €4.246 billion, a 32.2% year-over-year increase.
Key Takeaways: The current earnings season clearly signals that in the innovation-driven pharmaceutical industry, there are no permanent leaders, only continuous evolution. First, the throne of the top-selling drug has officially changed hands, marking the GLP-1 era's entry into a fiercely competitive new phase. Eli Lilly's tirzepatide has surpassed Novo Nordisk's semaglutide to become the new global "drug king." More importantly, Eli Lilly's strategy of "trading price for volume" has been highly successful. Q4 sales volume surged 46% year-over-year, fully offsetting a 5% decline in actual prices, and the company provided strong 2026 revenue guidance. Second, the reports reveal profound shifts in industry growth drivers and strategic anxieties. Although Merck's Keytruda sales reached a new high of $31.68 billion, growth has significantly slowed. This has forced Merck to accelerate new product development and mergers and acquisitions to prepare for the "post-Keytruda era." This trend is similar to Novo Nordisk's challenges, highlighting the risks of relying on a single blockbuster drug. As a result, giants are actively exploring new growth avenues, with competition extending from current injectables to oral formulations, such as Novo Nordisk's oral Wegovy and multi-target drugs like Eli Lilly's triple-agonist Retatrutide, to build product moats. Looking ahead, price competition and pipeline iteration will be key focal points. The impact of the U.S. drug pricing bill is materializing, and the "price war" for GLP-1 drugs has begun. The ability to effectively offset price pressures through volume expansion, as Eli Lilly has done, will be crucial for profitability. Meanwhile, the clinical progress and commercialization pace of next-generation products will determine whether current leaders can maintain their advantages.
Investment Opportunities in Hong Kong's Pharmaceutical and Medical Sector Beyond U.S. giants, Hong Kong's pharmaceutical and medical sector has seen notable developments since the beginning of the year. We examine three segments: innovative drugs, medical devices, and traditional Chinese medicine.
Innovative Drugs: Offshore Expansion Shifts from "Signing" to "Execution" Innovative drugs remain the strongest engine for the pharmaceutical sector, with the narrative evolving from event-driven BD signings to value realization through clinical progress and commercialization. There has been a continued surge in offshore expansion of innovative drugs since the start of the year. For instance, the landmark licensing agreement between Sino Biopharmaceutical and AstraZeneca stands out. Sino Biopharmaceutical licensed overseas rights for a GLP-1R/GIPR dual-target agonist and other pipeline projects to AstraZeneca, receiving a $1.2 billion upfront payment and a potential total deal value of $17.3 billion. This transaction is significant not only for its size but also because AstraZeneca secured collaboration rights based on Sino Biopharmaceutical's proprietary sustained-release drug delivery technology and AI-driven peptide discovery platform, indicating international recognition of Chinese pharmaceutical companies' technological capabilities. The market's focus is shifting from "whether offshore expansion is possible" to "whether it can succeed post-expansion." Industrial Securities notes that after BD deals are finalized, valuation reassessments based on potential peak sales and success probabilities will continue as overseas Phase III trials commence and regulatory approval certainty increases.
Medical Devices: Dual Catalysts from Policy Normalization and Earnings Recovery Unlike the "growth" narrative of innovative drugs, the medical device sector is gaining consensus for a "turnaround from adversity." The core logic lies in the gradual normalization of centralized procurement policies' impact, with companies recovering after strategic adjustments, potentially leading to both earnings and valuation recovery. Long-term institutional optimism centers on three factors: 1) Medical innovation: New technologies such as surgical robots, brain-computer interfaces, and AI healthcare. 2) Offshore expansion: Enhanced international competitiveness of domestic devices, expanding the sector's logic from import substitution to globalization. 3) Industry consolidation: Increasing market concentration trends. Additionally, high-quality companies like Mindray Medical and Cofoe Medical are expected to list in Hong Kong in 2026, increasing the supply of quality targets and overall liquidity in the sector, further strengthening its appeal.
Traditional Chinese Medicine: Policy Support vs. Fundamental Realities The traditional Chinese medicine sector has shown recent activity, but there is a gap between driving factors and fundamental performance, with opportunities leaning more toward thematic and structural trends. Recent rallies in A-share and Hong Kong-listed TCM stocks are linked to policy support, including the "14th Five-Year Plan for Traditional Chinese Medicine Development" and revisions to the "Drug Administration Law Implementation Regulations," which have boosted market confidence. However, despite policy tailwinds, the sector's fundamentals have faced pressure over the past year, with significant performance divergence. Key reasons include weak retail drug sales, volatility in over-the-counter product sales outside hospitals, and insufficient end-demand. Thus, the sector's rise is primarily driven by policy expectations, adjustments to the essential drug list, and state-owned enterprise reform dividends, rather than a broad-based earnings recovery.
ETF Allocation Environment and Strategic Considerations 1. Attractive valuations: Despite significant gains in 2025, the Hong Kong Stock Connect Healthcare Theme Index's price-to-earnings ratio of 30.77x remains relatively low, at the 49.95th percentile over the past five years. 2. Favorable macro liquidity: Bocom Schroders Fund's outlook indicates that a stronger yuan and stable Hong Kong dollar may attract capital inflows into Hong Kong assets. Future Federal Reserve interest rate decisions' impact on global liquidity will be critical to monitor. 3. Policy window: The upcoming National People's Congress in early March will clarify annual growth targets and industrial policy priorities, serving as a key catalyst for risk appetite repricing in Q1.
In summary, allocation strategies for Hong Kong's pharmaceutical sector should be more refined. Against a backdrop of attractive valuations, the primary focus should be on the "offshore expansion of innovative drugs" theme, which offers the highest growth potential and strongest logic. Secondary attention should be given to the "medical devices" sector for its earnings recovery potential post-policy normalization. For the "traditional Chinese medicine" sector, selective stock-picking is essential to identify companies capable of translating policy support into tangible earnings improvements.
Relevant ETFs include Hong Kong Stock Connect Healthcare ETF Huabao (159137), Hong Kong Stock Connect Innovative Drug ETF (520880), and Pharmaceutical ETF (562050), among others. Notably, the Hong Kong Stock Connect Healthcare ETF (159137) has shown a four-day consecutive rise from its bottom, with温和放量 (moderate volume increase).
On the earnings front, among the 10 component companies that have disclosed performance forecasts, 9 are projected to be profitable. Six companies, including Joinn Laboratories, MicroPort Scientific, Tigermed, WuXi AppTec, Ark Health, and ChunLi Orthopedics, are expected to report net profit growth of over 100% year-over-year.
MACD golden cross signals have formed, indicating positive momentum for several stocks.
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