Big Pharma Earnings Lift Sector; Moderna Wins FDA Approval

Eli Lilly ($LLY) reported strong Q2 results and raised full-year 2026 revenue guidance to $85-87B, driven by volume gains despite price declines. Analysts expect the company to report quarterly earnings of $6.58 per share, up from $6.31 per share in the year-ago period. The company's weight-loss drug franchise continues to drive outsized demand, though executives have acknowledged capacity constraints as a potential bottleneck to growth.

Pfizer ($PFE) raised 2026 revenue guidance following its Q2 update, posting a 1-month share price return of 8.81% and a 1-year total shareholder return of 15.42% despite reporting a net loss and sizeable non-cash impairments. Analysis suggests $PFE could be 12% undervalued following the revised guidance and solid non-COVID product performance.

Amgen ($AMGN) raised guidance as rapid growth across cardiovascular, bone and rare-disease medicines offset the company's decision to abandon an obesity candidate.

Moderna ($MRNA) received FDA approval for its influenza vaccine mFLUSIVA, becoming the company's fifth approved product globally and fourth FDA-approved product. The company expects supply to be available in select retailers in the coming weeks. $MRNA released its Q2 2026 earnings presentation alongside the approval announcement.

Compass Pathways ($CMPS) reported a cash position of $433 million and advanced its rolling NDA submission for COMP360 in treatment-resistant depression, targeting a first-half 2027 launch.

Schrödinger Inc. ($SDGR) reported Q2 2026 revenue of $58.89 million and shifted to a net profit of $5.98 million, reversing prior losses. The company expanded its long-running collaboration with Bristol Myers Squibb ($BMY) to deploy its new agentic AI co-scientist platform, Bunsen, across Bristol Myers Squibb's research organization. $SDGR shares rose 8.5% following the earnings release and partnership expansion.

Second-quarter annual contract value growth accelerated as demand broadened across large pharmaceutical customers, biotechnology companies and materials-science customers, while the company launched early access for Bunsen.

Merck KGaA ($MRK) reported Q2 adjusted profit rose 9%, aided by strong performances in its life science and electronics divisions. The company raised its annual profit outlook following the stronger-than-expected quarterly results.

Royalty Pharma ($RPRX) reported 14% total receipts growth and raised full-year 2026 guidance for the second consecutive quarter.

Healthcare stocks have lagged broader market performance this year, with a few sectors dominating gains, though analysts suggest many healthcare stocks appear ready to gain ground. The sector faces ongoing scrutiny around drug pricing policy and Medicare negotiations, though strong volume growth at major pharmaceutical companies has offset pricing pressures in recent quarters. Compass Pathways' targeted first-half 2027 launch of COMP360 represents a potential catalyst for the psychedelic therapeutics space, pending NDA completion and FDA review.