Bernstein Analyst: Pharma Sector Resilient to Tariffs, Zepbound Gaining Market Share

This analysis is based on the YouTube interview [1] with Courtney Breen, Senior Research Analyst at Bernstein, published on November 4, 2025, which provided insights on pharmaceutical sector dynamics, tariff impacts, and investment recommendations.

The pharmaceutical sector is demonstrating notable resilience amid broader market challenges, currently up 0.43% on November 4, 2025 [0]. This outperformance is particularly significant given that most other sectors are trading lower, with Technology down 0.74% and Communication Services down 2.97% [0]. Breen’s assertion that tariffs are “not really landing on the industry” [1] appears well-founded, reflecting the pharmaceutical sector’s defensive characteristics including pricing power, patent protections, and the essential nature of healthcare products.

The commentary about Zepbound rapidly gaining market share in obesity drugs [1] reflects intense competition in the GLP-1 receptor agonist market. Eli Lilly, Zepbound’s manufacturer, recently announced a $3 billion investment in a new Dutch manufacturing facility [2], indicating strong demand expectations for their obesity and diabetes drug portfolio. This investment will create 500 permanent jobs and expand production capacity for oral medicines, including orforglipron, Lilly’s first oral GLP-1 receptor agonist [2].

Amgen (AMGN) represents Breen’s top pick amid mixed earnings results [1]. The stock is currently trading at $296.30, down 2.13 (-0.71%) for the session [0]. Despite today’s decline, Amgen maintains strong fundamentals with ROE of 97.92%, net profit margin of 18.96%, and operating margin of 23.44% [0]. The stock has shown resilience over the past week with a 5-day gain of 1.97%, though it’s down 6.50% over the past year [0].

Breen’s bullish stance on Amgen is supported by broader analyst sentiment. The stock maintains a “BUY” consensus rating with 21 analysts (58.3%) recommending buy, 12 (33.3%) holding, and only 3 (8.3%) recommending sell [0]. The consensus price target stands at $342.00, representing potential upside of 15.4% from current levels [0]. Bernstein has specifically maintained a Buy rating on Amgen with a $335.00 price target [1].

The pharmaceutical industry faces significant regulatory challenges, exemplified by Amgen’s lawsuit against Colorado over the state’s price ceiling on Enbrel [3]. This legal action highlights ongoing pricing pressures and could set precedents for state-level drug pricing controls, potentially affecting profitability across the sector. The Colorado case represents a significant regulatory risk that may impact pharmaceutical pricing power and could lead to similar actions in other states.

Amgen’s Enbrel faces patent expiration challenges, with the initial 20-year patent having expired in 2018, though the company maintains additional patents extending protection until 2029 [3]. This timeline creates medium-term revenue uncertainty that should be factored into analysis, particularly given Enbrel’s contribution of $3.32B to Amgen’s revenue [0].

• Regulatory Pressures
  : State-level drug pricing initiatives like Colorado’s Enbrel price ceiling [3] could expand to other states and impact industry profitability
• Patent Exposures
  : Amgen’s Enbrel patent timeline creates medium-term revenue uncertainty [3]
• Market Competition
  : The obesity drug market’s rapid evolution and intense competition could impact margins and market share dynamics
• Pricing Environment
  : Medicare negotiations and commercial payer trends continue to pressure pharmaceutical pricing

• Sector Resilience
  : Pharmaceutical stocks are outperforming broader markets during tariff uncertainties [0]
• Obesity Drug Growth
  : Zepbound’s rapid market share gains [1] and Eli Lilly’s $3 billion manufacturing investment [2] indicate strong growth potential
• Valuation Opportunities
  : Amgen’s current price of $296.30 represents a discount to the consensus target of $342.00 [0]
• Product Pipeline
  : Diversified revenue streams with established products like Prolia ($4.37B) and ENBREL ($3.32B) [0]

The pharmaceutical sector is demonstrating relative strength amid market uncertainties, with Healthcare up 0.43% while most other sectors decline [0]. Bernstein’s analysis suggests that tariffs have minimal impact on the industry [1], supporting the sector’s defensive characteristics. Amgen remains a top pick for Bernstein [1], with strong fundamentals including ROE of 97.92% and attractive valuation at 24.08x P/E [0]. However, regulatory risks from state-level pricing controls [3] and patent expiration timelines [3] warrant careful monitoring. The obesity drug market continues to evolve rapidly, with Zepbound gaining market share [1] supported by significant manufacturing investments [2].