Healthcare Stocks Remain Undervalued Amid Market Volatility

Healthcare stocks rebounded 4.4% last week, led by Eli Lilly's 12% gain, recovering from previous disappointing trial results. UnitedHealth Group rose 21.2% on Berkshire Hathaway's acquisition of a $1.6 billion stake. Despite this, healthcare stocks still trade at a 7.3% discount to their fair value estimate on average. The Morningstar US Market Index rose 1.0% last week, and overseas markets rose, with the Morningstar Developed Markets ex US Index up 1.9% and the Emerging Markets Index up 1.5%. The Producer Price Index rose higher than expected, supporting expectations of a September interest rate cut. Economists will focus on the Federal Reserve's annual symposium at Jackson Hole for comments on the central bank's independence.

Healthcare stocks rebounded last week, led by Eli Lilly's 12% gain, recovering from previous disappointing trial results. UnitedHealth Group rose 21.2% on Berkshire Hathaway's acquisition of a $1.6 billion stake. Despite this, healthcare stocks still trade at a 7.3% discount to their fair value estimate on average. The Morningstar US Market Index rose 1.0% last week, and overseas markets rose, with the Morningstar Developed Markets ex US Index up 1.9% and the Emerging Markets Index up 1.5%. The Producer Price Index rose higher than expected, supporting expectations of a September interest rate cut. Economists will focus on the Federal Reserve's annual symposium at Jackson Hole for comments on the central bank's independence.

Eli Lilly's stock surged nearly 3% in volatile trading, driven by a wave of insider buying and renewed optimism over its obesity drug pipeline. Insiders, including CEO David Ricks and board members, collectively purchased over $3.8 million in shares [2]. This follows a 20% drop in LLY’s stock since late July after disappointing trial data for its obesity drug orforglipron. The purchases signal a belief in undervaluation, with CEO Ricks’ $1M buy particularly impactful. Meanwhile, the market is parsing mixed signals: while the obesity drug pipeline remains a long-term growth driver, recent legal challenges in Texas and pricing pressures from competitors like Novo Nordisk (NVO) cloud near-term optimism.

GoodRx's strategic foray into the GLP-1 drug market in 2025 marks a pivotal moment in the evolution of healthcare accessibility and biotech partnership models. By securing a landmark partnership with Novo Nordisk to offer Ozempic and Wegovy at a fixed cash price of $499 per month, GoodRx is redefining the infrastructure of prescription drug distribution [1]. This move reflects a broader industry shift toward direct-to-consumer (DTC) models, digital pharmacy ecosystems, and data-driven affordability solutions, all of which are reshaping the $1.4 trillion U.S. prescription drug market.

GoodRx's collaboration with Novo Nordisk addresses the unmet needs of 19 million Americans lacking insurance coverage for GLP-1 medications. By offering these FDA-approved drugs at a fixed price, the company bypasses traditional insurance intermediaries, which often obscure true costs and create barriers to access. This model aligns with the Trump administration's pro-DTC policies, which have incentivized lower-cost alternatives to insurance-dependent pricing. The result? A 22% year-over-year surge in GLP-1 inquiries on GoodRx's platform, underscoring the pent-up demand for transparent, affordable solutions.

The financial implications are equally compelling. GoodRx's Pharma Manufacturer Solutions (PMS) segment, which facilitates partnerships like this, grew 32% year-over-year in Q2 2025, generating $35 million in revenue. This segment leverages per-transaction fees and recurring revenue streams, positioning GoodRx as a scalable infrastructure player in the GLP-1 space. The company's stock surged 30.83% following the Novo Nordisk announcement, reflecting investor confidence in its ability to monetize this high-growth market.

For investors, GoodRx's 2025 strategy presents a compelling case. The company's 2024 revenue of $792.3 million and net income of $16.4 million signal a turnaround from a 2023 net loss. With 2025 revenue guidance of $810–840 million and a 32% PMS growth rate, GoodRx is well-positioned to capitalize on the GLP-1 boom and expand into new therapeutic areas like erectile dysfunction and chronic disease management.

The appointment of Laura Jensen, a former Amazon Pharmacy executive, as President of Pharma Solutions underscores GoodRx's commitment to innovation. Her expertise in e-commerce and pharma partnerships could further accelerate revenue growth. Additionally, the company's focus on AI-driven affordability programs and condition-specific subscriptions (e.g., ED) opens new revenue streams while addressing unmet patient needs.

GoodRx's GLP-1 strategy is more than a product launch—it is a blueprint for the future of healthcare. By leveraging digital transformation, biotech partnerships, and regulatory alignment, the company is addressing systemic inefficiencies in drug affordability while capturing a share of the exploding GLP-1 market. For investors, this represents a high-conviction opportunity in a sector poised for sustained growth. As the healthcare landscape continues to evolve, GoodRx's ability to innovate and scale will likely cement its role as a key player in the digital health revolution.

References:
[1] https://www.ainvest.com/news/goodrx-glp-1-gambit-catalyst-healthcare-accessibility-biotech-synergy-2508/
[2] https://www.ainvest.com/news/eli-lilly-surges-3-insider-buying-regulatory-drama-2508/