To The Moon

In the first quarter of 2026, the performance landscape of global pharmaceutical giants has been refreshed once again. On one side, Eli Lilly ignited its growth engine with the strong performance of tirzepatide, while Novo-Nordisk A/S expanded comprehensively with its four semaglutide pipelines collectively exceeding 52.888 billion Danish kroner. On the other side, Merck began cultivating new growth drivers as its Keytruda withstood patent competition pressures, and Sanofi SA continued its dominance in the autoimmune field with Dupixent.

Driven by multiple core products, these multinational pharmaceutical companies achieved a strong start in 2026.

An analyst from the pharmaceutical sector at a securities firm stated that the performance of multinational pharmaceutical companies has become highly dependent on "blockbuster drugs," where possessing a "trump card" product is sufficient to determine a company's growth, valuation, and even strategic direction.

A clear signal emerging from the financial reports is that, amid multiple challenges such as patent cliffs, policy negotiations, and market competition, how to deeply explore and strategically operate core blockbuster products has evolved from a "growth option" to a "survival imperative."

**Performance of the Two Weight-Loss Drug Giants Shows Comprehensive Growth**

At the beginning of 2026, Eli Lilly demonstrated to the outside world with explosive results that the metabolic sector is one of the most worthwhile areas for heavy investment. According to its financial report, Eli Lilly achieved revenue of $19.799 billion in the first quarter of 2026, a year-on-year increase of 56%; net profit surged 168% year-on-year to $7.396 billion, with earnings per share reaching $8.26, a 179% increase compared to the same period last year.

These figures significantly exceeded market expectations, prompting Eli Lilly to subsequently raise its full-year performance guidance, increasing expected revenue by $2 billion to a range of $82 billion to $85 billion.

Tirzepatide supported nearly two-thirds of Eli Lilly's revenue: the diabetes version Mounjaro generated revenue of $8.662 billion in the first quarter, a substantial 125% year-on-year increase, while the weight-loss version Zepbound contributed $4.16 billion, an 80% year-on-year growth.

This means that tirzepatide collectively contributed approximately $12.8 billion, accounting for 64% of Eli Lilly's total revenue during the period. It is worth noting that the sales growth of Mounjaro in overseas markets was partly attributable to the drug's inclusion in China's national medical insurance directory.

On the other side of the metabolic sector, Novo-Nordisk A/S's semaglutide also continued its trend of comprehensive growth. According to the first-quarter 2026 financial report, Novo-Nordisk A/S achieved sales of 96.823 billion Danish kroner during the period, representing a 32% growth at constant exchange rates. The combined sales of semaglutide exceeded 52.888 billion Danish kroner. Specifically, the weight-loss injection Wegovy contributed 18.235 billion Danish kroner, the diabetes drug Ozempic generated 27.825 billion Danish kroner, the oral weight-loss tablet Wegovy brought in 2.256 billion Danish kroner, and the oral diabetes tablet Rybelsus earned 4.572 billion Danish kroner.

The comprehensive performance across four formulations demonstrates Novo-Nordisk A/S's capability to cover the entire spectrum from injections to oral administration and from weight loss to diabetes management in the GLP-1 sector.

While the metabolic sector is dominated by these two giants, both have also begun actively developing their next-generation products. Eli Lilly's oral small molecule GLP-1 receptor agonist orforglipron was approved for marketing by the U.S. FDA on April 1, becoming the world's first oral small molecule non-peptide GLP-1 receptor agonist. The company hopes it will significantly expand the beneficiary population.

Prescriptions for Novo-Nordisk A/S's oral weight-loss tablet Wegovy also grew rapidly, exceeding 1.3 million prescriptions in the first quarter alone, with cumulative prescriptions surpassing 2 million. Additionally, Novo-Nordisk A/S announced that China's National Medical Products Administration formally approved the marketing application for IcoSema (insulin icodec/semaglutide) injection NovoMix in March. This drug is the world's first and currently only approved once-weekly basal insulin/GLP-1RA combination, planned for a global launch in China in the second half of 2026.

CEO Mike Doustdar clearly positioned the strategic significance of the oral Wegovy tablet, calling it "the only oral peptide drug for treating obesity" and stated it is creating a new category, "redefining the expectations of patients and doctors."

The aforementioned analyst pointed out that the competition in oral GLP-1 drugs has escalated from "Novo-Nordisk A/S leading alone" to a pattern of "Eli Lilly catching up and comprehensively benchmarking."

"The small molecule route holds great potential in terms of cost and scalable production. In the future, whoever can achieve 'high quality + low cost + stable supply' will grasp the initiative in the market," the analyst said.

**The Next Battlefield for Multinational Pharma: Increasing Bets on China**

Beyond the competition in the GLP-1 market, various multinational pharmaceutical companies are also focusing on expanding their respective "trump card" products to seek market growth.

Merck's financial report shows that the company's sales reached $16.29 billion in the first quarter of 2026, exceeding analyst expectations of $15.83 billion. The growth was primarily driven by strong demand for Keytruda and contributions from new products like Winrevair and the subcutaneous formulation of Keytruda. With quarterly revenue of approximately $8 billion, Keytruda continued to play the role of a core pillar.

Although overall performance exceeded expectations, Merck simultaneously narrowed its full-year financial outlook. There is widespread external concern about how the company will manage a smooth transition after Keytruda's patent expires. Merck is not unprepared—the subcutaneous formulation of Keytruda has already shown initial growth potential in Q1 of this year, and new drugs like Winrevair are gradually taking over the baton.

More importantly, Merck's business development layout in the Chinese market should not be underestimated. In the first quarter of 2026, the total value of out-licensing deals for Chinese innovative drugs exceeded $60 billion. The strategy of multinational pharmaceutical companies using licensing agreements and acquisitions of Chinese biotech assets to hedge against patent cliffs is becoming a trend. Along with other multinational pharmaceutical companies, Merck has regarded "increasing bets on Chinese innovation" as a long-term solution combining strategic defense and offense.

Sanofi SA delivered an impressive report card for the first quarter of 2026, with total sales reaching €10.51 billion (approximately $12.29 billion), a 13.6% increase at constant exchange rates. Operating profit was €2.97 billion (approximately $3.47 billion), both exceeding market expectations. The core blockbuster product Dupixent continued to play a leading role, with quarterly sales reaching €4.17 billion, a 30.8% year-on-year increase, once again breaking the €4 billion mark.

However, beneath the positive performance, Sanofi SA's concerns are also evident. Investors and senior management are acutely aware that Dupixent's patent will expire early next decade, and Sanofi SA has yet to present a definitive pipeline capable of filling this revenue gap. Over the past 12 months, hampered by a series of disappointing clinical trial results, Sanofi SA's stock price has accumulated a decline of approximately 13%. This also means that Sanofi SA's greatest challenge is how to improve R&D output efficiency and break the over-reliance on a single blockbuster drug.

Novartis AG's situation in the first quarter was tense: overall net sales fell 1% year-on-year to $13.113 billion, marking the first year-on-year decline in nearly two years. Impacted by generic competition and pricing pressures, core operating profit decreased 12% year-on-year to $4.897 billion, falling short of market expectations.

Despite overall weakness, several of Novartis AG's core brands still showed explosive growth. Pluvicto, as the first blockbuster in the radiopharmaceutical field, achieved sales of $642 million in the first quarter, a 70% year-on-year increase at constant exchange rates. This achievement is noteworthy in a key dimension: in the highly homogeneous competitive landscape of cancer treatment, Novartis AG has secured a unique moat by betting on RLT, a highly differentiated sector with significant technological barriers.

The small interfering RNA drug Leqvio also surged 69% in the first quarter to $452 million, with full-year sales expected to exceed $2 billion. Driven by the high growth of both blockbuster brands and newly launched drugs, Novartis AG maintained its core guidance of low single-digit growth in net sales for the full year, fully demonstrating the strategic value of core products in navigating cyclical fluctuations.

AstraZeneca PLC also achieved strong growth thanks to its differentiated pipeline. The company reported revenue of $15.288 billion in the first quarter, an 8% year-on-year increase, with the oncology segment contributing $6.798 billion, a 16% growth. Enhertu, the core ADC product co-developed with Daiichi Sankyo, generated revenue of $831 million, a 34% year-on-year increase, far exceeding analyst expectations. Combined sales with Daiichi Sankyo reached $1.422 billion. Even more outstanding was the performance of the TROP2 ADC drug Datopotamab deruxtecan, which recorded quarterly revenue of $43 million, a more than tenfold year-on-year increase, with total combined revenue with partners reaching $102 million.

The aforementioned analyst noted that the valuation premium currently assigned by the market to these "trump card" products far exceeds that of traditional drug market scales. Any market fluctuations could potentially trigger a valuation reassessment.

**Breaking Through**

In 2026, the "ticking time bomb" of patent expirations poses a significant challenge for many giants.

For example, when Bristol-Myers Squibb released its fourth-quarter 2025 financial report, one core theme was that several of its blockbuster drugs are facing the challenge of patent protection expiration. Sales of the blood cancer drugs Revlimid and Sprycel continued to decline, as these drugs lost patent exclusivity in 2022 and 2024, respectively. In the coming years, the patent protection for the anticoagulant Eliquis and the cancer drug Opdivo will also expire sequentially. This combination generated total global sales of $24.5 billion last year, accounting for 51% of the company's total revenue.

Furthermore, pricing policies are tightening comprehensively. In April 2026, the General Office of the State Council issued the "Several Opinions on Improving the Drug Price Formation Mechanism," reshaping drug pricing rules from multiple dimensions, including self-assessment of initial prices for innovative drugs, linkage of medical insurance negotiation payment standards, regular advancement of centralized procurement, and transparency in online and offline price comparisons.

The aforementioned analyst believes that in the face of pricing pressures, generic drug competition, and continuously lowered capital market expectations, the breakthrough strategies of multinational pharmaceutical companies are showing several clear paths.

First, horizontally extending indications and formulation matrices to prolong product life cycles. Keytruda and Dupixent repeatedly demonstrate this strategy—by expanding indication coverage and launching new formulations like subcutaneous injections to "extend the life" of the products.

Second, deeply exploring the business development value of Chinese innovative assets. The total value of out-licensing deals for Chinese innovative drugs exceeded $60 billion in the first quarter of 2026. Multinational pharmaceutical giants are leveraging overseas BD asset purchases, cooperative development, and equity investments to access high-barrier innovative pipelines at low cost, becoming a mainstream approach to "hedge against patent cliffs."

Third, betting on highly differentiated cutting-edge sectors and accelerating the multipolarization of asset portfolios. Novartis AG's Pluvicto capitalizes on the technological barriers of radiopharmaceuticals, AstraZeneca PLC firmly occupies the high ground in ADCs and rare disease drugs, and Eli Lilly and Novo-Nordisk A/S have taken the lead in the oral small molecule GLP-1 field, all demonstrating an active transition from "reliance on blockbuster products" to "multipolar growth."

"Facing multiple challenges from patents, markets, and policies, leading pharmaceutical companies are seeking breakthroughs: on one hand, consolidating the position of existing 'drug kings' while actively cultivating the next generation of growth engines; on the other hand, viewing cutting-edge technologies like ADCs, radiopharmaceuticals, RNA therapies, and gene editing as long-term strategic assets, continuously increasing investment through internal R&D and external mergers and acquisitions to diversify risks associated with single technology paths," the analyst further pointed out.

Against the backdrop of increasing cost control, pharmaceutical companies are also accelerating the use of real-world data, AI-assisted marketing, and other means to optimize marketing resource allocation and enhance the penetration rate of high-value products in key departments, leveraging lower costs to drive greater sales.

"When core blockbuster drugs are both the trump card on which multinational pharmaceutical companies rely for profits and the 'invisible shackles' forcing them to promote strategic change, those who can protect current performance while having the foresight to complete the proactive layout of the next-generation pipeline before the patent cliff are the ones likely to gain a first-mover advantage in the continuously reshaping global pharmaceutical landscape of the next decade," the analyst emphasized.

In the current market environment, multiple multinational pharmaceutical companies have successively announced increased investment in the Chinese market. The strategy of multinational pharmaceutical companies in China has comprehensively upgraded from "selling drugs in China" to "innovating in China, manufacturing in China, and co-creating with China." This is not only a vote of confidence in the Chinese market but also a key part of the restructuring of their global supply chain and R&D landscape.