Pharmaceutical companies benefited from the sell-off in the AI sector. Which stocks are nearing their all-time highs?

Shares of the largest pharmaceutical companies have approached all-time highs amid a sell-off in the technology sector, MarketWatch noted. Investors are seeking more predictable returns, which large, diversified drugmakers can provide, the publication notes.

Biopharmaceutical stocks are rising amid a sell-off in the tech sector. AbbVie shares hit an all-time high on October 15, reaching $283.4, while Eli Lilly shares closed at $1,251, close to their record closing high of $1,280.3 on August 19. The State Street Health Care Select Sector SPDR ETF, which holds significant positions in Eli Lilly and AbbVie, has risen 5.4% over the past five days.

Other biopharmaceutical stocks are also rising this week. Over the past five days, Gilead Sciences shares have gained 7%, and Amgen shares have risen 6.5%, even though neither company has made any announcements in the U.S. this month. Merck shares rose 2%. UnitedHealth Group shares gained 9.6% over five days following strong third-quarter results, which convinced investors that the company’s business is moving in a positive direction.

On Thursday, October 15, investors also shifted funds into stocks of essential goods manufacturers and government bonds amid a sell-off in AI-related securities, according to MarketWatch. Pressure on the sector was exacerbated by concerns over the scale of spending on artificial intelligence and a slowdown in Anthropic’s revenue growth.

Pharmaceutical companies are doing what they do best: investing in future developments and extending the patent protection for their best-selling drugs, explains MarketWatch. Against the backdrop of turbulence in the technology sector in recent months, this stability and predictability of results have become particularly attractive to investors.

Investors view Lilly—which has become a favorite thanks to its dominant position in the GLP-1 drug market—as one of the pharmaceutical industry’s major success stories, according to MarketWatch. This week, the rise in its stock price was not tied to any single clinical trial result or deal, the publication notes. However, Lilly’s stock typically benefits from a deterioration in investor sentiment toward AI and major developments in the pharmaceutical industry, MarketWatch emphasizes. This was the case, for example, after Moderna and Merck announced in August that their experimental therapeutic cancer vaccine had met its primary endpoint in Phase 3 trials.

Despite the tremendous success of its GLP-1 drugs, Lilly continues to actively invest in future growth. According to CEO Dave Ricks, the company has closed 40 deals totaling $20 billion since the beginning of the year. In addition, two new Lilly weight-loss drugs are nearing the regulatory review stage.

Additional data on the subcutaneous form of Skyrizi likely drove the rise in AbbVie’s stock, according to MarketWatch. According to one of AbbVie’s executives, the new version could lead to “significant” sales growth for the company’s best-selling drug. Last year, Skyrizi generated $17.6 billion in revenue for AbbVie. The drug is widely used to treat patients with autoimmune diseases, including inflammatory bowel disease and Crohn’s disease.

The development of subcutaneous formulations of drugs that are currently administered via injection in medical facilities has become one of the areas of focus for biopharmaceutical companies seeking to extend the patent protection for their best-selling drugs, explains MarketWatch.

This article was AI-translated and verified by a human editor