Pfizer, Merk report Q4 results: Citi's Geoff Meacham on key takeaways
Speakers
Geoff Meacham
— Head of Healthcare Research, Citi
Summary
Geoff Meacham, Citi Research's head of U.S. pharmaceuticals and biotechnology, joined Squawk Box to discuss Pfizer and Merck's Q4 results. He said Citi remains Neutral on both but he favors Merck over Pfizer, citing Merck's aggressive business development and improved pipeline sentiment while noting the Keytruda patent cliff remains. Meacham also said Pfizer's Q4 was solid with unchanged guidance and competitive but early Phase 2 GLP-1 data. He prefers cleaner-growth pharma/biotech names such as Eli Lilly, Gilead, and Vertex over patent-cliff-exposed stories.
- Pfizer and Merck reported Q4 results; Pfizer fell about 5% while Merck held up better.
- Meacham said Merck's guidance was a key concern entering the quarter, but its deal activity has improved pipeline sentiment.
- Merck still faces the late-decade Keytruda patent cliff, which is not fully solved.
- Pfizer's Q4 was good and guidance was unchanged; its Phase 2 GLP-1 data looked competitive but remains early.
- Citi is Neutral on both Pfizer and Merck, but Meacham would favor Merck over Pfizer.
- Meacham prefers growthier, clean-growth pharma/biotech names including Eli Lilly, Gilead, and Vertex.
- Patent expirations were described as a major sector overhang, with rerating timing hard to predict.
- Both stocks bounced after White House pharma agreements last fall.
Ideas
Pfizer GLP-1 competitive but still early
Meacham said Pfizer's fourth quarter was good and guidance was unchanged, while the Phase 2 GLP-1 data looked competitive with a lot of development room remaining. He remains Neutral on the stock, so the setup is a pipeline watch rather than a clean bullish call.
Favor Merck over Pfizer despite neutral ratings
Citi has a Neutral rating on both Merck and Pfizer, but Meacham says he would probably favor Merck over Pfizer. He credits Merck's aggressive business development with improving the pipeline and investor sentiment, though Merck has not fully solved the Keytruda patent cliff late in the decade. He also notes both stocks bounced after last fall's White House pharma agreements but does not say the move is fully played out.
Prefer clean-growth Lilly, Gilead, Vertex
Meacham prefers the growthier, clean-growth names in pharma/biotech because patent cliffs are a major sector overhang and it is difficult to predict when patent-exposed companies will rerate. He says Citi remains a big fan of Eli Lilly and likes Gilead and Vertex on the biotech side, calling them clean growth stories that come out on top.
