The Vanity of Pharmaceutical Valuations

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It is a truth universally acknowledged that a company in possession of a fashionable drug must be in want of an exorbitant valuation. Eli Lilly, currently bathed in the golden light of investor fancy for its GLP-1 concoctions, exemplifies this rather tiresome phenomenon. A price-to-earnings ratio of 46 suggests not shrewd investment, but a collective suspension of disbelief. Its dividend yield, a paltry 0.6%, is merely a gesture – a crumb thrown to those who demand some return on their folly.

One observes, with detached amusement, the tribulations of its competitors, Novo Nordisk and Pfizer. Their declining fortunes present, for the discerning eye, a far more interesting spectacle. To chase the ephemeral glitter of success is vulgar; to recognize value amidst the wreckage, that is the mark of a true connoisseur.

Novo Nordisk: A Second Fiddle, Played with Some Skill

Eli Lilly’s triumph with Mounjaro and Zepbound has, naturally, cast a long shadow. A 99% and 175% increase in sales, respectively, are figures that command attention – or, at least, provoke envy. Novo Nordisk’s 31% growth, while respectable in any other context, appears, by comparison, almost… modest. One might say it lacks a certain panache.

The company’s warning of weak financial results in 2026, due to an agreement with the American government, has predictably sent shivers through the market. Investors, it seems, possess the memory of a goldfish. Yet, a 66% decline in share price since mid-2024 presents a tempting opportunity for those who prefer to buy when others are panicking. A P/E ratio of 13 and a dividend yield of 3.9% are not to be sneezed at, even if the payout ratio is a rather sober 40%.

The introduction of a GLP-1 pill is, of course, a clever stroke. Convenience, after all, is the last refuge of the unimaginative. Improved performance in 2027 is anticipated, though one must always remember that anticipation is the mother of disappointment.

Pfizer: A Sleeping Giant, or Merely a Fallen Idol?

Pfizer’s failure to develop its own GLP-1 drug is a cautionary tale. To rely on partnerships and acquisitions is to admit defeat, though it is a defeat often disguised as pragmatism.

However, to dismiss Pfizer as a has-been would be a grave error. The company possesses a long and distinguished history of innovation. It may not currently be leading the pharmaceutical parade, but it has done so before, and is perfectly capable of doing so again. Its success with oncology and migraine treatments suggests that it is not entirely devoid of imagination.

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For those with a taste for a turnaround story, Pfizer might prove an agreeable addition to their portfolio. A dividend yield of 6.3% is undeniably attractive, though a payout ratio exceeding 100% suggests a certain… recklessness.

More conservative investors might prefer the relative safety of Novo Nordisk. But for the truly contrarian, the dividend is merely a pleasant side effect. A P/E ratio of around 20 is, shall we say, adequate.

A Moment for Reflection

Pfizer and Novo Nordisk are currently out of favor, and that, my dear readers, is precisely when they become interesting. To buy while others are selling requires courage, of course, and a certain degree of intellectual independence. But it also offers the potential for substantial rewards. To acquire stocks that appear undervalued relative to the overhyped Eli Lilly is not merely a shrewd investment; it is an act of exquisite good taste.

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2026-02-11 18:23