Overview

• The S&P 1500 Health Care Index fell 6.9% in Q2 2025 versus a 10.9% gain for the S&P 500, with providers, life-science tools, biotech and pharma lagging while health-tech and medtech rose.
• UnitedHealth’s challenges included a guidance cut followed by suspended guidance and the CEO’s removal, which the letter ties to Medicare Advantage underwriting and Optum Health physician margins.
• PGIM exited Bristol-Myers Squibb after negative updates on Camzyos and Cobenfy and a slightly disappointing quarter, as the letter also flags looming headwinds from IRA price cuts and upcoming generic or biosimilar competition.
• Selected winners included Alnylam, with Amvuttra approved in late April for ATTR cardiomyopathy and showing early launch strength, and Eli Lilly, whose tirzepatide franchise delivered better-than-expected margins and EPS despite cautious guidance.
• The update notes Verona Pharma’s surge culminating in Merck’s July 7 agreement to acquire the company for about $10 billion, or $107 per share, which another fund called a successful exit.