Albert Bourla, CEO of Pfizer, speaking on Squawk on the Street at the World Economic Forum in Davos, Switzerland on Jan. 20, 2026.Pfizer on Tuesday reported fourth-quarter results that topped estimates even amid dwindling demand for its Covid products, while reaffirming its modest 2026 guidance that rattled investors in December.The pharmaceutical giant is looking to longer-term investments in its pipeline, including its $10 billion acquisition of the obesity biotech Metsera, to counter waning Covid product ...

Core Viewpoint - Merck reported strong fourth-quarter earnings driven by demand for its cancer immunotherapy Keytruda, but provided a modest 2026 outlook that fell short of Wall Street expectations due to upcoming patent expirations and generic competition [1][2]. Financial Performance - For the fourth quarter, Merck posted net income of $2.96 billion, or $1.19 per share, compared to $3.74 billion, or $1.48 per share, in the same period last year [4]. - Adjusted earnings for the fourth quarter were $2.04 per share, slightly above the expected $2.01 per share [6]. - Revenue for the quarter was $16.4 billion, a 5% increase from the previous year, and exceeded expectations of $16.19 billion [5][6]. 2026 Outlook - Merck anticipates 2026 revenue between $65.5 billion and $67 billion, lower than analysts' expectations of $67.6 billion [2]. - The company expects adjusted earnings per share to be between $5 and $5.15, compared to the analyst estimate of $5.36 [2]. Acquisition and Charges - The 2026 guidance includes a one-time charge of approximately $9 billion, or around $3.65 per share, related to the acquisition of Cidara, which is developing a flu prevention drug [3]. Cost Management - Merck is implementing a cost-cutting plan aimed at reducing expenses by $3 billion by the end of 2027 to offset revenue losses from the upcoming patent expiration of Keytruda in 2028 [5]. Drug Pricing Deal - Under a "most favored nation" deal, Merck will sell existing treatments to Medicaid patients at the lowest price offered in other developed nations and will receive a three-year reprieve from tariffs [4].

Core Insights - Pfizer is currently involved in a competitive acquisition battle for Metsera, an obesity drug developer, against Novo Nordisk, with Pfizer's initial offer of approximately $7.3 billion being challenged by Novo Nordisk's increased bid of around $10 billion [2][3][10] - Pfizer has filed lawsuits against Metsera and Novo Nordisk, alleging breach of merger agreement and anticompetitive actions, while seeking to prevent Metsera from terminating the merger agreement [4][5][10] - A recent drug pricing agreement with the Trump administration is seen as a significant milestone for Pfizer, providing clarity on future strategic investments and growth [9][10] Acquisition Battle - Pfizer's definitive agreement to acquire Metsera was announced in September for about $7.3 billion, aiming to re-enter the obesity market after halting the development of danuglipron [2] - Novo Nordisk's unsolicited proposal to acquire Metsera has escalated to a total value of around $10 billion, prompting Pfizer to revise its offer to approximately $8.1 billion [3] - The outcome of the acquisition remains uncertain due to ongoing litigation and counteroffers, with Metsera likely to choose the higher bid [8] Legal Actions - Pfizer has initiated a lawsuit claiming that Metsera breached its merger agreement by considering Novo Nordisk's competing offer, arguing that the latter violates antitrust laws [4] - A second lawsuit was filed against Metsera's directors and Novo Nordisk, labeling the latter's proposal as an anticompetitive move to maintain dominance in the GLP-1 drug market [5] Drug Pricing Agreement - In September, Pfizer signed a drug pricing deal with the Trump administration, agreeing to cut prescription drug prices and align them with those in other developed countries [9] - The agreement includes a three-year exemption from tariffs on pharmaceutical imports in exchange for increased domestic investments, providing long-term clarity for Pfizer's strategic direction [9][11] Financial Performance - Pfizer's stock has declined by 6.3% this year, contrasting with a 7.1% increase in the industry [12] - The company's shares are currently trading at a price/earnings ratio of 8.0, which is lower than the industry average of 15.69 and its own 5-year mean of 10.52 [14] - The Zacks Consensus Estimate for 2025 earnings has increased from $3.05 to $3.11 per share, while the estimate for 2026 has risen from $3.12 to $3.14 per share over the past week [16]

Core Viewpoint - Eli Lilly is set to report its third-quarter results, with significant attention on the potential deal regarding the pricing of its weight-loss drug with the Trump administration [1] Company Summary - Eli Lilly is a drugmaker preparing to announce its financial performance for the third quarter [1] - The company faces uncertainty regarding the negotiations with the Trump administration over the pricing strategy for its weight-loss drug [1] Industry Summary - The pharmaceutical industry is closely monitoring Eli Lilly's upcoming results and the implications of its pricing negotiations, which could set precedents for other companies in the sector [1]