Biotech’s Waterloo: The Stocks That Conquered And The Ones That Didn’t

Napoleon once said, “In victory, you deserve champagne. In defeat, you need it.” Healthcare investors popped both in 2025.

While the sector at large looked like a casualty of macro shrapnel, a few names marched through the battlefield with earnings like artillery fire – and stock prices to match.

The top-line view was grim: the S&P 500 healthcare sector sank 5% while the broader market climbed more than 7%.

And yet, biotech ETFs XBI and IBB surged 37% and 29% respectively—rising from their bear-market graves with all the subtlety of a defibrillator. The contradiction wasn’t confusion. It was a selection.

Idexx Laboratories (IDXX) was the year’s undisputed warhorse, galloping ahead nearly 75% on the back of something shockingly unsexy: pet diagnostics.

Q3 revenue jumped 13%, EPS rose 21% to $3.40, and full-year guidance moved up to a range of $12.81 to $13.01. The catalyst was over 1,700 inVue Dx instruments placed and double-digit growth in its Companion Animal Group.

In a year where humans debated hospital bills, their dogs got premium bloodwork, and investors who saw that early made out like bandits.

Cardinal Health (CAH) returned nearly 68%, not with a miracle drug, but with relentless execution.

Revenues hit $222.6 billion (up 18% ex-contract), EPS came in at $8.24, and they raised FY26 guidance to $9.30–$9.50.

The cherry on top here is their bold move into physician-practice management with the acquisition of Solaris Health. This isn’t your grandfather’s drug distributor anymore. It has turned into a vertically integrated, margin-expanding machine.

HCA Healthcare (HCA), up over 52%, proved that scale matters when patients return in droves.

Q3 revenue reached $19.2 billion, net income hit $1.64 billion, and adjusted EBITDA climbed 18.5%.

As for their guidance for the year, they reported EPS of $27 to $28 and $76.5 billion in revenue. In a sector anxious about pricing pressures and staffing shortages, HCA just printed cash.

Even the typically staid drug distributors like Cencora (COR, formerly AmerisourceBergen) and McKesson (MCK) were in rare form – up 40.3% and 32% respectively.

Cencora’s Q4 revenue hit $75.8 billion, operating income surged 25%, and full-year revenue topped $321 billion thanks to tailwinds from GLP-1 drug volumes.

McKesson, not to be outdone, posted $359 billion in FY25 revenue and raised FY26 guidance after a 64% EPS jump in Q4.

These aren’t sleepy logistics plays anymore, but high-volume toll booths in a world where therapies are getting both more expensive and more ubiquitous.

Gilead Sciences (GILD) reminded investors that cash flow still counts, rising 33.6% with $3.7 billion in Biktarvy sales, $1 billion in dividends, and a $435 million buyback.

Johnson & Johnson (JNJ), up 33.2%, pushed out new approvals like INLEXZO and expansions for TREMFYA, while lifting full-year guidance to nearly $94 billion in sales.

And then there’s Eli Lilly (LLY), which frankly deserves its own parade.

With GLP-1 obesity therapies Mounjaro and Zepbound pushing Q3 revenue up 54% to $17.6 billion and EPS to $7.02, Lilly raised full-year guidance to $22.50.

They even scored FDA approval for imlunestrant, a breast cancer drug, just to remind us they’re not a one-trick pony. The market still hasn’t fully priced in the secondary indications obesity drugs are poised to dominate – cardiovascular, NASH, maybe even cognitive decline.

But where there are victors, there are always fallen flags.

Walgreens (WBA) was 2025’s Icarus, down 70% after reporting a $3.3 billion loss, announcing 1,200 store closures, and still managing a dead-cat bounce that fizzled by year-end.

Merck (MRK) and Bristol-Myers Squibb (BMY) each fell 20% as their star drugs, Keytruda and Revlimid, neared the edge of the patent cliff. Good Q3 numbers couldn’t outweigh the ticking clock of revenue attrition.

Moderna (MRNA), down 40%, learned the hard way that being a “platform company” doesn’t mean much when your only product loses relevance. Q3 revenue dropped 45%, COVID sales fell off a cliff, and their cytomegalovirus program got the axe after failing endpoints. Biogen

(BIIB) looked similarly stalled, with GAAP EPS down 39% and expectations of a mid-single-digit revenue decline.

Even Illumina (ILMN) couldn’t escape the gravity.

Despite $380 million in buybacks and raised guidance, Q2 revenue dropped 3% and integration concerns from the Grail spinoff kept sentiment sour. The once-unquestioned king of genomics suddenly looked…mortal.

This year made clear what many forgot: guidance moves stocks, not hope. Cardinal Health raised it and soared. Moderna narrowed it and sank.

And revenue growth, not just margin games or creative accounting, was the premium investors paid for. Interest rates north of 4% punished the overleveraged.

Political pressure on drug pricing chipped away at defensiveness. And yet, pockets of alpha roared back with the kind of conviction you only get when fundamentals collide with narrative at scale.

Obesity has graduated from trend to transformation. Surgical robotics is no longer a futuristic side project but the new standard of care.

Distribution turned out to be the most quietly powerful business in healthcare. The investors who caught these shifts didn’t just survive 2025. They thrived in it, glass in hand.

Napoleon would’ve approved.