Big pharma's multiple looming patent cliffs: What to know

Yahoo

11-07-2025

The pharmaceutical industry is staring down a major patent cliff, with key drugs from Merck (MRK), Bristol Myers Squibb (BMY), and Johnson & Johnson (JNJ) set to lose exclusivity by 2030.
Yahoo Finance Senior Reporter Anjalee Khemlani and Freedom Capital Markets chief global strategist Jay Woods join Market Domination host Josh Lipton to discuss the industry's risks and how Wall Street is responding.
To watch more expert insights and analysis on the latest market action, check out more Market Domination here.
The pharmaceutical industry is bracing for one of its most financially significant patent cliffs in over a decade with multiple blockbuster drugs set to lose exclusivity by 2030. Our team coverage here to break down the impacts these could have on the industry. Got Jay Woods. And we've got Yahoo finances Angela Angeli Angeli Camblani An Sorry with you. Set it up for us An. What are we looking at?
We're looking at a number of the, quote unquote, biggest names, and I say that because they are still part of the big pharma club, but not necessarily ones that are favorites or they have sort of lost their steam a little bit, if you will. We're looking at Merck, Pfizer, among the biggest ones, J&J as well, Bristol Myers Squibb, all these names who have been sort of the behemoths of, you know, years past. There's questions about what their future looks like because of these patent cliffs toward the end of the decade. We know Eli Lilly sort of went through their period a few years ago. So what Lily faced before, and it's now clearly made such a huge comeback, that is what everyone else is going through right now. It's the pain of growth and questions of, what do you got for me next? And that's the question Wall Street is basically posing right now.
Jay, how you thinking through it?
Yeah, I mean, people don't realize this the significance of this cliff ending. Uh you can look at Merck as the perfect example. Viagra was the the big drug back in 2000. Well, guess what? It peaked when Viagra was no longer its own exclusive drug. It was generic. And now we're seeing it come to fruition. You mentioned J&J, that drug is Stelara, mentioned Bristol Myers, Eliquis and Opdivo. Eli Eli Lilly did well. Why? Because they had, as Donald Trump said, the fat shot, his words, not mine. But anyway, what we saw this week was very interesting because Merck did a small acquisition. You know, 10 billions is small for you and I, but they took over a UK company called Verona. I'm sorry, Verona. I'm thinking Corona Friday afternoon. Uh but it's a COPD drug. They're looking for exclusivity. And I think this could heat up M&A activity. The biotech sector starting to catch a bid, starting to turn around. This could be the beginning of something as we head into earning season as well.
I don't know about heating up, though. I I would I would pull that back just warming up, maybe. Yeah. It is lukewarm because I mean, yes, it's a big acquisition. We also saw Pfizer make a number of huge acquisitions, 43 billion for Seagen, right? And in that, you saw the potential for blockbusters to fill that gap for their cliff. Keytruda is the nearly 30 billion revenue per year, and they can't fill it with, you know, one acquisition that way. So I think that maybe the companies haven't thought in time to fill the gaps. And it's only really when Wall Street started asking the question, when investors started asking, wait, you have a patent cliff coming up, right? What are you doing about that?
Exactly. Well, I'm looking at it the trader point of view. Um, you know, yes, it's not heating up by any margin, but when it's ice cold, you have to turn on the heat. So I think we're starting to get some green shoots. I hate I hate that. But we're starting to see some activity there where people are looking, okay, what could be the next catalyst? And I think M&A is the best one because you look at companies like Pfizer, they haven't really come out with that next big thing. You know, I mean, they had COVID and we saw what they did, and you know, COVID's over. So, uh, we'll see what is next.
As a trader, J&J earnings next week, walk me through that setup.
Oh, man, I wish I it's a Dow stock. It's been going nowhere in a neutral pattern between 138, 168. Near term, you may get a nice little rally up to the upper end of that channel. But what will be the catalyst to break that stock out? For an investor, if you're looking for a great long-term play, you need this stock to really give you a couple quarters of activity. I don't see it. Uh, so it's one I would stay away from, but if you like good, smart, safe, you know, dividend plays in the Dow, then I give you Johnson and Johnson.