As we enter 2026, let's remind ourselves who the largest pharma players are and what the rationale is behind their valuation.
1. Eli Lilly and Company is THE largest pharma with the highest market cap (+38% in 2025) because of its obesity/diabetes medicines growth, together with their rapid manufacturing expansion that converts demand into revenue. It also became in 2025 the 1st pharma company ever to be valued at +$1000B.
2. Johnson & Johnson is mostly valued for its resilience with diversified cash flows across innovative pharma and medtech and a strong balance sheet. Stronger-than-expected operational results led to a fantastic +43% in 2025 for J&J.
3. AbbVie is highly valued based on investors' confidence in the post-Humira era (+27% in 2025): Skyrizi and Rinvoq are replacing lost Humira revenue faster than expected, supporting earnings durability.
4. Roche similarly to J&J, is priced as a defensive compounder (+27% in 2025) pharma + diagnostics diversification, strong oncology heritage, and dividend reliability.
5. AstraZeneca has experienced a broad-based growth across oncology, CVRM, respiratory, and rare disease with ambitious long-term targets. A small discount on geopolitical/pricing risk and the challenge of sustaining high growth across many programs and regions. Solid + 30% for AZ.
6. Novartis is now 100% focused on innovative medicines after its portfolio simplification (spun off Sandoz), which led to a margin expansion and productivity narrative. + 23% for Novartis's stock in 2025.
7. Merck is valued for massive current cash flows led by Keytruda, strong vaccine presence, and a robust development engine. Key risk is the widely discussed Keytruda patent cliff, and uncertainty on their new launches and pipeline assets can replace that earnings base (shy +6% for Merck & Co in 2025)
8. Novo Nordisk lost a lot of market cap (-48%) in 2025 because of disappointing next-gen obesity data (CagriSema) versus high expectations, intensifying competition with Eli Lilly + CEO transition uncertainty.
9. Amgen is the Big biotech among large pharmas with meaningful dividends/buybacks and a pipeline for renewed growth. Notably, their obesity candidate MariTide is a key upside lever. The market discounts the need for sustained late-stage wins. +26% in 2025.
10. Gilead Sciences is valued on durable HIV cash flows (Biktarvy-led franchise) + oncology/cell-therapy as the main growth re-acceleration path. Very solid +33% growth in 1 year for Gilead.
