Most of the largest pharmaceutical and biotechnology companies in the world beat Wall Street's estimates for earnings in the fourth quarter of 2020, although some of the sector's biggest names, such as Novartis AG, Merck & Co. Inc. and Pfizer Inc., fell short of expectations.

Analysts said the business fundamentals remain strong for the biopharmaceutical space into 2021 even as the COVID-19 pandemic takes a toll on global markets. Johnson & Johnson, the largest healthcare company by market capitalization, saw 8.4% growth in pharmaceutical sales in the quarter from the year before, highlighting the drugmaker's stability.

The healthcare industry also played a unique role in the battle against COVID-19, with vaccine-makers Pfizer, J&J and Moderna Inc. collecting emergency use authorizations for their inoculations.

Cowen analyst Steve Scala said in a Feb. 25 note that the fourth-quarter results were "solid," with continued momentum in the new year, highlighting AstraZeneca PLC and Eli Lilly and Co. as companies "that offer the greatest visibility and fewest risks."

Despite missing estimates in the fourth quarter, Merck boasted a 30% increase in Keytruda sales from the same quarter in 2019, and Pfizer pointed to the $15 billion windfall to come from its COVID-19 vaccine in 2021.

Companies such as Lilly, Gilead Sciences Inc. and Regeneron Pharmaceuticals Inc. also brought in some extra cash from COVID-19 treatments that became unexpected blockbusters.

Scala said investors likely view the pharmaceutical sector as "relatively safe" after a year that sent other markets reeling.

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