Just caught that Merck and Pfizer both reported earnings, but here's the thing—while the broader market is looking solid, these two pharma heavyweights are underperforming pretty noticeably. Merck down 1%, Pfizer nearly 5%. Not the move you'd expect from decent earnings.

Dug into the numbers and it's actually kind of interesting. Merck pulled in $16.4B in Q4 sales (4% adjusted growth) and annual revenue topped $65B. Keytruda is still the cash cow—$32B for the year, basically half their revenue. They're clearly worried about future exclusivity issues, so they're leaning hard on newer stuff like Winrevair ($1.4B in year one) and Capvaxix (under $800M). Animal Health also did solid work with 8% growth to $6.4B.

Pfizer's situation is a bit different though. Revenue actually dipped 2% to around $63B for 2025, which explains why the stock underperformed more sharply. But here's what caught my eye—their oncology division is holding strong with Padcev and Lorbrena helping offset losses elsewhere. Adjusted EPS climbed 4% to $3.22, so margins are improving at least.

Both companies are guiding for 2026, and honestly, the outlook looks cautious. Merck expecting around $66B (basically flat), Pfizer in the $59.5-62.5B range with EPS between $2.80-3.00. Patent cliffs and pricing pressure are real headwinds, but management seems confident their pipelines will turn things around—Pfizer's got like 20 pivotal studies starting this year.

So yeah, despite the underperformance today, these pharma giants aren't going anywhere. They're adapting, shifting to oncology and new therapies, and weathering the storm. Just interesting to see them underperform when the rest of the market is rallying. Worth keeping an eye on how those pipelines actually pan out.