As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the branded pharmaceuticals industry, including Royalty Pharma (NASDAQ: RPRX) and its peers.

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 11 branded pharmaceuticals stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 0.7%.

In light of this news, share prices of the companies have held steady as they are up 3.6% on average since the latest earnings results.

Royalty Pharma (NASDAQ: RPRX)

Pioneering a unique business model in the pharmaceutical industry since 1996, Royalty Pharma (NASDAQ: RPRX) acquires rights to receive portions of sales from successful biopharmaceutical products, providing funding to drug developers without conducting research itself.

Royalty Pharma reported revenues of $630.6 million, up 11% year on year. This print fell short of analysts’ expectations by 27.9%. Overall, it was a slower quarter for the company with a significant miss of analysts’ revenue estimates.

“Royalty Pharma has delivered a strong start to 2026 across multiple dimensions. We grew Royalty Receipts by 13% and announced up to $1.25 billion of royalty transactions in the first quarter,” said Pablo Legorreta, Royalty Pharma’s Chief Executive Officer and Chairman of the Board.

Royalty Pharma delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 10.3% since reporting and currently trades at $55.63.

Read our full report on Royalty Pharma here, it’s free.

Best Q1: Eli Lilly (NYSE: LLY)

Founded in 1876 by a Civil War veteran and pharmacist frustrated with the poor quality of medicines, Eli Lilly (NYSE: LLY) discovers, develops, and manufactures pharmaceutical products for conditions including diabetes, obesity, cancer, immunological disorders, and neurological diseases.

Eli Lilly reported revenues of $19.8 billion, up 55.5% year on year, outperforming analysts’ expectations by 13.7%. The business had a stunning quarter with a beat of analysts’ EPS and revenue estimates.

Eli Lilly scored the biggest analyst estimate beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 33.4% since reporting. It currently trades at $1,136.

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

Weakest Q1: 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 $2.26 billion, up 2.9% year on year, falling short of analysts’ expectations by 2%. It was a softer quarter as it posted a significant miss of analysts’ revenue and EPS estimates.

As expected, the stock is down 28.3% since the results and currently trades at $79.76.

Read our full analysis of Zoetis’s results here.

Phibro Animal Health (NASDAQ: PAHC)

With a portfolio of approximately 800 product lines serving farmers and veterinarians in 90 countries, Phibro Animal Health (NASDAQ: PAHC) develops, manufactures, and markets health products for livestock and companion animals, including antibacterials, vaccines, nutritional supplements, and mineral additives.

Phibro Animal Health reported revenues of $383.5 million, up 10.3% year on year. This print surpassed analysts’ expectations by 8%. It was a strong quarter as it also put up a solid beat of analysts’ revenue and EPS estimates.

The stock is down 46% since reporting and currently trades at $31.57.

Read our full, actionable report on Phibro Animal Health 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 $16.29 billion, up 4.9% year on year. This result beat analysts’ expectations by 3%. Overall, it was a strong quarter as it also recorded an impressive beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

The stock is up 7.5% since reporting and currently trades at $119.24.

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

Market Update

Late in 2025 into early 2026, there was hand-wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure?

These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability.

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