The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how branded pharmaceuticals stocks fared in Q2, starting with Zoetis (NYSE: ZTS).

Looking ahead, the branded pharmaceutical industry is positioned for tailwinds from advancements in precision medicine, increasing adoption of AI to enhance drug development efficiency, and growing global demand for treatments addressing chronic and rare diseases. However, headwinds include heightened regulatory scrutiny, pricing pressures from governments and insurers, and the looming patent cliffs for key blockbuster drugs. Patent cliffs bring about competition from generics, forcing branded pharmaceutical companies back to the drawing board to find the next big thing.

The 10 branded pharmaceuticals stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 3.1%.

Thankfully, share prices of the companies have been resilient as they are up 5.2% on average since the latest earnings results.

Zoetis (NYSE: ZTS)

Originally spun off from Pfizer in 2013 as the world's largest pure-play animal health company, Zoetis (NYSE: ZTS) discovers, develops, and sells medicines, vaccines, diagnostic products, and services for pets and livestock animals worldwide.

Zoetis reported revenues of $2.46 billion, up 4.2% year on year. This print exceeded analysts’ expectations by 1.9%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ constant currency revenue estimates and a beat of analysts’ EPS estimates.

Interestingly, the stock is up 2.6% since reporting and currently trades at $156.

Is now the time to buy Zoetis? Access our full analysis of the earnings results here, it’s free.

Best Q2: Supernus Pharmaceuticals (NASDAQ: SUPN)

With a diverse portfolio of eight FDA-approved medications targeting neurological conditions, Supernus Pharmaceuticals (NASDAQ: SUPN) develops and markets treatments for central nervous system disorders including epilepsy, ADHD, Parkinson's disease, and migraine.

Supernus Pharmaceuticals reported revenues of $165.5 million, down 1.7% year on year, outperforming analysts’ expectations by 7.4%. The business had an incredible quarter with a beat of analysts’ EPS estimates and full-year operating income guidance exceeding analysts’ expectations.

Supernus Pharmaceuticals delivered the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 13.7% since reporting. It currently trades at $42.69.

Is now the time to buy Supernus Pharmaceuticals? Access our full analysis of the earnings results here, it’s free.

Corcept (NASDAQ: CORT)

Focusing on the powerful stress hormone that affects everything from metabolism to immune function, Corcept Therapeutics (NASDAQ: CORT) develops and markets medications that modulate cortisol to treat endocrine disorders, cancer, and neurological diseases.

Corcept reported revenues of $194.4 million, up 18.7% year on year, falling short of analysts’ expectations by 3.5%. It was a softer quarter as it posted full-year revenue guidance missing analysts’ expectations.

Corcept delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. Interestingly, the stock is up 9.2% since the results and currently trades at $73.17.

Read our full analysis of Corcept’s results here.

Organon (NYSE: OGN)

Spun off from Merck in 2021 to create a company dedicated to addressing unmet needs in women's health, Organon (NYSE: OGN) is a global healthcare company focused on improving women's health through prescription therapies, medical devices, biosimilars, and established medicines.

Organon reported revenues of $1.59 billion, flat year on year. This result surpassed analysts’ expectations by 2.8%. Overall, it was a strong quarter as it also logged a beat of analysts’ EPS estimates and full-year revenue guidance meeting analysts’ expectations.

The stock is down 2.4% since reporting and currently trades at $9.44.

Read our full, actionable report on Organon here, it’s free.

Merck (NYSE: MRK)

With roots dating back to 1891 and a portfolio that includes the blockbuster cancer immunotherapy Keytruda, Merck (NYSE: MRK) develops and sells prescription medicines, vaccines, and animal health products across oncology, infectious diseases, cardiovascular, and other therapeutic areas.

Merck reported revenues of $15.81 billion, down 1.9% year on year. This number came in 1.1% below analysts' expectations. Taking a step back, it was a mixed quarter as it also produced an impressive beat of analysts’ constant currency revenue estimates but full-year revenue guidance meeting analysts’ expectations.

Merck had the slowest revenue growth among its peers. The stock is flat since reporting and currently trades at $84.50.

Read our full, actionable report on Merck here, it’s free.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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