Notable healthcare headlines for the week: UNH, Eli Lilly and Merck in focus

Wall Street rallied higher as investors digested upbeat earnings from big tech companies during the week.

The Nasdaq gained 2.2%, the S&P 500 moved up by 0.7%, and the Dow added 0.7% this week.

However, the S&P 500 Health Care Index Sector (XLV [https://seekingalpha.com/symbol/XLV]) slipped about 1.4% during the week.

The top S&P 500 healthcare gainers and losers for the last week are as follows:

TOP 5 GAINERS:

Cardinal Health (CAH [https://seekingalpha.com/symbol/CAH]) +17.85%

Regeneron Pharmaceuticals (REGN [https://seekingalpha.com/symbol/REGN]) +12.74%

Edwards Lifesciences (EW [https://seekingalpha.com/symbol/EW]) +8.34%

Bristol-Myers Squibb Company (BMY [https://seekingalpha.com/symbol/BMY]) +5.19%

Eli Lilly (LLY [https://seekingalpha.com/symbol/LLY]) +4.54%

TOP 5 LOSERS:

Baxter International (BAX [https://seekingalpha.com/symbol/BAX]) -19.77%

The Cigna Group (CI [https://seekingalpha.com/symbol/CI]) -19.01%

DexCom (DXCM [https://seekingalpha.com/symbol/DXCM]) -17.22%

Labcorp (LH [https://seekingalpha.com/symbol/LH]) -9.13%

Charles River Laboratories International (CRL [https://seekingalpha.com/symbol/CRL]) -8.61%

Here are some of the important healthcare stories from this week:

UNITEDHEALTH STOCK RISES ON Q3 BEATS, RAISED GUIDANCE

UnitedHealth (UNH [https://seekingalpha.com/symbol/UNH]) shares rose [https://seekingalpha.com/news/4509112-unitedhealth-rises-on-q3-beats-raised-guidance] on Tuesday after the managed care giant beat Wall Street expectations with its Q3 results and raised its full-year earnings outlook.

The company now expects full-year 2025 adjusted earnings of at least $16.25 per share, up from its prior guidance of $16.00, and slightly above the $16.22 consensus estimate. [https://seekingalpha.com/symbol/UNH/earnings/estimates#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]

For Q3, UnitedHealth (NYSE:UNH [https://seekingalpha.com/symbol/UNH#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]) generated adjusted EPS of $2.92 on revenue of $113.2B that grew +12.3% Y/Y. Both metrics comfortably beat analysts' estimates [https://seekingalpha.com/news/4509125-unitedhealth-non-gaap-eps-of-292-beats-by-011-raises-fy-earnings-outlook#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews].

ELI LILLY STOCK POPS ON RAISED FULL-YEAR OUTLOOK

Eli Lilly (LLY [https://seekingalpha.com/symbol/LLY]) shares rose [https://seekingalpha.com/news/4511009-eli-lilly-stock-pops-on-raised-full-year-outlook] on Thursday after the drugmaker beat Wall Street expectations with its third-quarter results and raised its outlook for full-year 2025 amid solid demand for its widely popular weight-loss and diabetes drugs.

The firm now expects full-year revenue of $63B to $63.5B, compared to $60B–$62B previously, above the $61.63B expected [https://seekingalpha.com/symbol/LLY/earnings/estimates#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]. Adjusted EPS guidance was raised to be in the range of $23.00 to $23.70 from $21.75 to $23.00, compared to $22.50 projected by analysts.

As for Q3, Eli Lilly generated better-than-expected [https://seekingalpha.com/news/4511157-eli-lilly-non-gaap-eps-of-7_02-beats-by-1_13-revenue-of-17_6b-beats-by-1_53b#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] adjusted EPS of $7.02 on revenue of $17.6B that jumped nearly 54% year-on-year, driven by strong demand for diabetes drug Mounjaro and weight loss therapy Zepbound.

MERCK STOCK DIPS AFTER NARROWING FULL-YEAR SALES OUTLOOK

Merck (MRK [https://seekingalpha.com/symbol/MRK]) shares fell [https://seekingalpha.com/news/4511010-merck-stock-dips-after-narrowing-full-year-sales-outlook] on Thursday even after topping Wall Street expectations with its Q3 results, while narrowing the top end of its full-year 2025 sales outlook.

The Rahway, New Jersey-based company issued an updated outlook for full-year 2025, expecting sales of $64.5B-$65B (prior: $64.3B to $65.3B) and adjusted EPS of $8.93-$8.98 (prior: $8.87 to $8.97). Analysts estimate full-year earnings of $8.89 [https://seekingalpha.com/symbol/MRK/earnings/estimates?period=annual#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] on revenue of $64.81B.

Merck (MRK [https://seekingalpha.com/symbol/MRK]) still sees a full-year adjusted gross margin of around 82%.

The pharma giant’s third-quarter results topped estimates [https://seekingalpha.com/news/4511134-merck-non-gaap-eps-of-2_58-beats-by-0_23-revenue-of-17_3b-beats-by-320m#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews], with the company generating adjusted earnings of $2.58 per share on revenue of $17.3B that grew 3.6% Y/Y.

CVS HEALTH LIFTS FULL-YEAR PROFIT FORECAST, BOOKS $5.7B IMPAIRMENT CHARGE ON HEALTH CLINICS

CVS Health (CVS [https://seekingalpha.com/symbol/CVS]) fell [https://seekingalpha.com/news/4509980-cvs-health-lifts-full-year-profit-forecast-books-57b-impairment-charge-on-health-clinics] on Wednesday, even as the managed care giant exceeded Street forecasts with its third quarter 2025 results and raised its profit outlook for full year 2025 on insurance gains.

The company generated adjusted earnings of $1.60 on a record high $102.9B revenue that grew 7.8% Y/Y. Both metrics comfortably beat Street estimates [https://seekingalpha.com/news/4510061-cvs-beats-top-line-and-bottom-line-estimates-raises-fy25-outlook#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] for the quarter.

However, the company incurred a GAAP diluted loss per share of $3.13, inclusive of a $5.7 billion goodwill impairment charge tied to its struggling Health Care Delivery reporting unit.

Nevertheless, citing the outperformance of its Health Care Benefits and Pharmacy & Consumer Wellness segments, CVS (CVS [https://seekingalpha.com/symbol/CVS]) lifted its full-year guidance for adjusted earnings per share to $6.55-$6.65 from $6.30-$6.40 compared to $6.38 projected by analysts.

KENVUE, J&J SUED BY TEXAS OVER TYLENOL MARKETING RELATED TO ALLEGED AUTISM RISK

Texas Attorney General Ken Paxton sued [https://seekingalpha.com/news/4509372-kenvue-johnson-johnson-sued-texas-tylenol-marketing-related-alleged-autism-risk] Kenvue (KVUE [https://seekingalpha.com/symbol/KVUE]) and Johnson & Johnson (JNJ [https://seekingalpha.com/symbol/JNJ]), alleging that the marketing of over-the-counter painkiller Tylenol (acetaminophen) did not include a warning that prenatal exposure could lead to autism or ADHD.

Tylenol is sold by Kenvue (KVUE [https://seekingalpha.com/symbol/KVUE]), which was formerly known as Johnson & Johnson Consumer Health prior to it being spun-off with an IPO in 2023. The lawsuit claims that J&J is in violation of the Texas Uniform Fraudulent Transfer Act "by fraudulently transferring liabilities arising from Tylenol to a separate company, Kenvue, in order to shield their assets against lawsuits arising from the harmful impact Tylenol had on children."

In September, HHS said [https://seekingalpha.com/news/4497441-trump-administration-formally-links-tylenol-use-pregnancy-autism#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] that research it conducted indicated that Tylenol taken during pregnancy is linked to higher autism risk in offspring and should be avoided.

THERMO FISHER TO BUY CLARIO FOR ~$8.9B PLUS EARNOUTS

Thermo Fisher Scientific (TMO [https://seekingalpha.com/symbol/TMO]) confirmed [https://seekingalpha.com/news/4509995-thermo-fisher-to-buy-clario-for-89b-plus-earnouts] a deal to acquire clinical trial data management firm Clario Holdings from a shareholder group led by Astorg and Nordic Capital, Novo Holding, and Cinven for $8.875 billion in cash at close.

The transaction is expected to be completed by the middle of 2026, subject to customary closing conditions and regulatory approvals. Upon close, Clario will become part of Thermo Fisher’s Laboratory Products and Biopharma Services segment.

In addition to the initial cash purchase price at closing, Thermo Fisher has agreed to pay $125 million in January 2027 and up to $400 million of earn-out payments based on the performance of the business in 2026 and 2027.

MORE ON THE HEALTH CARE SELECT SECTOR SPDR® FUND ETF

* XLV: Lower Interest Rates And A Positive Growth Outlook Will Pave The Way [https://seekingalpha.com/article/4830912-xlv-lower-interest-rates-and-a-positive-growth-outlook-will-pave-the-way]
* XLV: Market Overreaction Could Drive Double Digit Shareholder Yield [https://seekingalpha.com/article/4822422-xlv-market-overreaction-could-drive-double-digit-shareholder-yield]
* XLV Vs. IHE: Will Pharmaceuticals Outperform Healthcare? [https://seekingalpha.com/article/4817656-xlv-vs-ihe-will-pharmaceuticals-outperform-healthcare]
* Overbought, oversold, and everything in between as October comes to a close [https://seekingalpha.com/news/4511627-overbought-oversold-and-everything-in-between-as-october-comes-to-a-close]
* Notable healthcare headlines for the week: UnitedHealth, Molina and Roche in focus [https://seekingalpha.com/news/4508388-notable-healthcare-headlines-for-the-week-unitedhealth-molina-and-roche-in-focus]