Large Cap Biopharmaceuticals had a Good Month

Large Cap Biopharma Stocks Did Well in August

• Biopharma stocks offer growth plus dividends.Standouts are ABBV, AZN and GILD. Comeback candidates for 2026: from LLY,REGN and VRTX.
• Risk remains from tariffs and pushback from Trump Administration policies on drug pricing.
• Innovation is still key to growth and cost effective drugs because of technology: antibodies, immunology, genomics, targeted therapies and soon AI.

The healthcare sector has been a laggard, flat over the past year as investors have done extremely well with technology and semiconductor stocks driven largely by AI and of course NVDA.The XLK Technology SPDR is up 12.8 % YTD and the iShares Semiconductor ETF (SOXX) is up 13.84% YTD easily outperforming the S&P 500 up about 10% YTD. But lately some market strategists are directing investors to look to the next sector rotation as valuations become stretched and “bubble” talk begins because of too much of a good thing. So despite all the issues with our overburdened and overpriced healthcare system, we have to look there because of the market size and how it can be viewed as an opportunity created by technology. That brings us to a well defined market where breakthroughs are evident -biopharmaceuticals. But despite all the attention given to drug pricing the U.S.industry pharmaceuticals still represent only about 10% of total healthcare outlays.

We have been positive on large cap biopharma all year despite the volatility from tariffs and tough political talk the Administration, Maybe we are too sensitive to Trump talk but it seems whenever be makes a casual comment about the industry it has a negative connotation , like when he mentioned the issue of the large R&D investment to develop a drug. So the comments create volatility on almost  daily level in addition to the volatility among the companies the sector.  But there are sufficient analysts and market data to form an investment decision knowing the underlying political and policy risk.

IBB UP 4.55% YTD.

Considering all of this the returns this yearcould beat the market  with 4-5 stocks you held our top two picks ABBV and GILD despite the loss in LLY and others.

Here is a Performance summary for August 2025 and Year to Date:

1. Our top pick over the past two years is Abbvie (ABBV) up 18.4% YTD and has done well in August up 10%.
2. Gilead Sciences (GILD) another top pick is up 22.3% YTD, but was flat in August.
3. Vertex Pharmaceuticals (VRTX) was a bit of a disappointment on the last earnings report but looks like a good bet for buying now. Analyst rating of 1.85. Upside from Next-gen triple combo for Cystic fibrosis (CF) and LT commercial potential for pipeline developments for acute pain longer term.
4. Astra-Zeneca (AZN) was an outstanding performer the past month with a strong Relative Strength (RSI) up 11% MTD and 21.85% YTD.
5. Eli Lilly (LLY) has slipped another 4% for August due to mixed results and competition from  NOVO in the GLP-! obesity market. The analyst rating at 1.53 makes it look like a buy because of Ph.3 data from their new oral pill for obesity and diabetes which should  launched by 2026.
6. Two ETFS we list the IBB and PPH which track the positive results for the large cap drug sector are up about 3%; see top pics in those ETFs
7. Regeneron (REGN) coming off the bottom up 4% or August and received upgrades with analyst rating of 1.64. because of a novel blood thiner for thrombosis.
8. Amgen, Bristol Myers and Pfizer look like value plays with strong dividends of 3.31% 5.26% and 6.9% respectively.
9. Two promising growth areas for biopharma  are neurodegenerative disease and oncology, in addition to diabetes and obesity.

LONG: in order of our weighting: ABBV, LLY, GILD, VRTX, AZN, PFE.

DATA sources: FinViz, Yahoo Finance and personal files.