AstraZeneca PLC (LSE:AZN) and GSK PLC (LSE:GSK, NYSE:GSK) remain among Berenberg’s top picks in the pharmaceuticals sector, with the broker reaffirming its 'buy' rating on both stocks.
The former carries a target price of £140, while the valuation for stock in the latter is £16. Though neither is among the headline-grabbing names in metabolic medicine, both are delivering dependable growth through oncology, vaccines, and respiratory treatments- still core drivers in the global healthcare market.
AZ continues to benefit from its strong pipeline in cancer and rare diseases, bolstered by its acquisition of Alexion.
Flagship drugs such as Tagrisso in lung cancer and Calquence for leukaemia help underpin its valuation.
GSK, while less exposed to high-growth pipeline assets, has made gains through its vaccine business, including shingles jab Shingrix, despite some recent downgrades to expected future value.
Much of the sector’s attention, though, is focused on the reshaping of global drug valuations around obesity and diabetes.
Berenberg’s updated ranking of the world’s top 50 drug brands by net present value shows that nearly one-third of their combined $2.1 trillion value is now tied to treatments for metabolic conditions.
Eli Lilly leads that charge, with Zepbound and Mounjaro now ranked as the most valuable pharmaceutical brands in the world.
The company also has other obesity and diabetes drugs in development, including orforglipron, pushing its exposure across six top-ranking drugs.
Berenberg says this broad pipeline gives Lilly a stronger position than Novo Nordisk, which relies more heavily on just a few compounds - most notably semaglutide, used in Ozempic and Wegovy.
Other movers on Berenberg’s list include Sanofi, which is rated 'buy' with a price target of €120, and UCB, also rated 'buy', reflecting investor confidence in a mix of late-stage assets and more defensive revenue streams.
Berenberg’s analysts say the market is placing greater emphasis on pipeline strength and lifecycle planning than ever before.
While weight-loss drugs are commanding the spotlight, long-term value will still come from diversity - companies with multiple high-value therapies across a range of conditions stand the best chance of sustaining returns.