By Bhanvi Satija LONDON, Jan 29 (Reuters) - France's Sanofi, among the world's largest vaccine makers, said on Thursday that its vaccines sales would be "slightly negative" this year, partly due to U.S. policy changes under ​President Donald Trump. Sanofi is eyeing high-single-digit overall sales growth in 2026. But vaccines will remain a weak spot ‌in the United States where Health Secretary Robert F. Kennedy Jr., a longtime anti-vaccine activist, has upended official recommendations in the past year. ...

Core Insights - Johnson & Johnson (JNJ) reported strong fourth-quarter 2025 results, with total revenues increasing by 9.1% to $24.56 billion and adjusted EPS rising by 20.6% year over year to $2.46 [1][10] - The company expects sales in 2026 to be between $100 billion and $101 billion, with adjusted EPS projected in the range of $11.43 to $11.63 [3][10] Innovative Medicines Segment - Despite the loss of exclusivity for Stelara, sales in the Innovative Medicines unit grew by 10.0% year over year to $15.76 billion in Q4 2025 [2][10] - The segment achieved over $60 billion in full-year sales for the first time in 2025, with 13 brands experiencing double-digit growth [6] - J&J anticipates continued growth in the Innovative Medicine segment in 2026, driven by key products and new launches, expecting a growth rate of 5% to 7% from 2025 to 2030 [7][10] MedTech Segment - The MedTech segment saw sales rise by 7.5% to $8.8 billion in Q4 2025, supported by strong performance in Cardiovascular, Surgery, and Vision [2][10] - J&J expects improved growth in the MedTech business in 2026, driven by new product launches across its portfolios [15][10] - The potential separation of the Orthopaedics franchise into a standalone company is expected to enhance growth and margins for the MedTech unit [14] Research and Development - J&J invested over $32 billion in R&D and M&A in 2025, including acquisitions that expanded its product portfolio [8] - The company achieved significant clinical and regulatory milestones, gaining approvals for new products that are expected to drive growth [9] Legal and Market Challenges - J&J faces challenges from the loss of patent exclusivity for Stelara, which accounted for approximately 18% of the Innovative Medicine unit's sales in 2024 [17] - The company is also dealing with the impact of the Medicare Part D redesign and ongoing legal battles related to its talc-based products [19][20] Stock Performance and Valuation - JNJ's stock has outperformed the industry, rising 48.5% over the past year compared to a 20.0% increase in the industry [23] - The stock is currently trading at a price/earnings ratio of 19.36, slightly above the industry average [25] - Earnings estimates for 2026 have increased, reflecting J&J's optimistic financial outlook [27] Overall Outlook - J&J's diversified business model, strong cash flows, and consistent dividend increases position the company well for future growth despite facing headwinds [30][31]

Core Insights - GSK raised its 2025 sales and earnings forecasts due to strong growth in its specialty HIV and cancer medicines, leading to a significant increase in share price [1][2] - Despite a decline in U.S. sales of the shingles vaccine Shingrix, GSK's shares have increased by nearly 4% this year, contributing to a total gain of around 25% [1] Sales Performance - Overall vaccine sales reached £2.68 billion in the quarter ending September 30, surpassing analyst expectations of £2.55 billion [3] - Sales outside the U.S. were a key driver of growth, while U.S. sales of Shingrix fell by 15% [3][4] - GSK's influenza vaccine sales also declined in the U.S. due to increased competition [4] Future Outlook - GSK's CEO transition to Luke Miels is anticipated to bring new strategies to navigate U.S. tariffs and offset revenue declines from expiring patents [2][5] - The company aims for annual revenue exceeding £40 billion ($54 billion) by 2031, with current estimates around £34 billion [5] - GSK expects annual revenue growth of 6% to 7% and core earnings per share growth of 10% to 12%, an increase from previous forecasts of 3% to 5% revenue growth and 6% to 8% earnings growth [5][6] Financial Performance - GSK reported core earnings per share of 55 pence on sales of £8.55 billion for the quarter, exceeding analyst expectations of 47.1 pence on £8.24 billion [6] - Revenue in the U.S. business grew by 7% at constant exchange rates, totaling £4.55 billion [6]

Core Insights - Merck (MRK) has announced a definitive agreement to acquire Verona Pharma (VRNA) for approximately $10 billion, which will enhance its cardio-pulmonary pipeline with the addition of Ohtuvayre, a drug approved for the maintenance treatment of chronic obstructive pulmonary disease (COPD) [1][10] - Ohtuvayre's unique dual inhibition of PDE3 and PDE4 distinguishes it from existing COPD treatments, combining bronchodilation and anti-inflammatory effects in a single inhaled therapy [2][10] - The acquisition is part of Merck's strategy to diversify its business as it faces the upcoming patent loss of its blockbuster drug Keytruda, which currently accounts for around 50% of the company's pharmaceutical sales [3][4][12] Merck's Product Portfolio and Pipeline - Keytruda remains Merck's biggest strength, driving steady revenue growth, particularly in early-stage non-small cell lung cancer [4][5] - Merck is exploring innovative combinations and developing a subcutaneous formulation of Keytruda to extend its patent life, with an FDA decision expected in September [6][7] - The company's phase III pipeline has nearly tripled since 2021, positioning it to launch around 20 new vaccines and drugs, including the promising Capvaxive and Winrevair [8][9] Challenges and Market Dynamics - Merck's reliance on Keytruda raises concerns about its ability to grow its non-oncology business ahead of the drug's loss of exclusivity in 2028 [12] - Competitive pressure is increasing, with potential challengers like Summit Therapeutics' ivonescimab showing promising results in clinical studies [13] - Sales of Gardasil, Merck's second-largest product, are declining in China due to weak demand, leading to a temporary halt in shipments [14][15] Financial Performance and Valuation - Merck's shares have underperformed the industry and the S&P 500, losing 14.0% so far this year [16][17] - The company's price/earnings ratio is currently at 8.99, lower than the industry average of 15.16, indicating potential attractiveness from a valuation standpoint [19] - EPS estimates for 2025 and 2026 have declined over the past 60 days, reflecting analysts' pessimistic outlook [22][24] Future Outlook - Despite current challenges, Merck's strong fundamentals and promising pipeline, along with the potential revenue from new products, suggest that long-term investors may find value in the stock [25][27] - The acquisition of Verona Pharma is expected to help fill the revenue gap created by Keytruda's upcoming loss of exclusivity, with Ohtuvayre already showing strong sales growth [26]

Core Insights - Johnson & Johnson (J&J) and Merck (MRK) are prominent U.S. healthcare companies with extensive R&D budgets and strong drug portfolios, particularly in oncology, immunology, and neuroscience [1][2] - J&J has a diversified business model, while Merck is heavily reliant on its blockbuster drug Keytruda, which raises concerns about future growth [3][12] J&J Overview - J&J operates through over 275 subsidiaries, providing resilience against economic cycles [3] - The Innovative Medicine unit reported a 4.4% sales increase in Q1 2025, driven by key products and new drug launches despite the loss of exclusivity for Stelara [4][11] - J&J's R&D pipeline is robust, with recent acquisitions enhancing its neurological and psychiatric drug market presence [5] - The MedTech segment faces challenges in the Asia Pacific, particularly in China, due to volume-based procurement and competitive pressures [6] - J&J anticipates a $2 billion sales impact from the Medicare Part D redesign in 2025 and is dealing with over 62,000 lawsuits related to talc products [7][8] - As of March 2025, J&J's cash and cash equivalents were $38.8 billion against long-term debt of $38.4 billion, resulting in a debt-to-capital ratio of 0.33 [9] MRK Overview - Merck has over six blockbuster drugs, with Keytruda being the primary revenue driver, particularly in early-stage non-small cell lung cancer [12] - The company has made significant progress in its regulatory and pipeline efforts, with a tripling of its phase III pipeline since 2021 [13] - New products like Capvaxive and Winrevair are launching successfully, and the FDA recently approved its RSV vaccine, Enflonsia [14] - However, Merck faces declining sales of Gardasil in China and challenges in its diabetes franchise [15][16] - As of March 2025, Merck's cash and cash equivalents were $9.2 billion against long-term debt of $33.5 billion, resulting in a debt-to-capital ratio of 0.41 [17] Financial Estimates - The Zacks Consensus Estimate for J&J's 2025 sales and EPS indicates a year-over-year increase of 2.7% and 6.2%, respectively [18] - For MRK, the estimates imply a 0.9% increase in sales and a 16.6% increase in EPS for 2025 [22] - Year-to-date, J&J's stock has risen 10%, while Merck's stock has declined by 17.5% [24] Valuation and Investment Considerations - J&J's shares trade at a forward P/E ratio of 14.53, while Merck's shares are at 8.76, indicating a more attractive valuation for Merck [26] - J&J's dividend yield is 3.32%, compared to Merck's 3.98% [28] - Both companies hold a Zacks Rank 3 (Hold), complicating the investment decision [31] - J&J is positioned for growth in 2025, while Merck's reliance on Keytruda raises concerns about its ability to sustain growth post-2028 [32][34]