Johnson & Johnson
JNJ
began 2021 with the successful development of its single-shot vaccine to prevent COVID-19.
In February, the FDA granted Emergency Use Authorization (EUA) to its single-dose COVID-19 vaccine candidate. The European Commission granted Conditional Marketing Authorization (CMA) to the vaccine earlier this month. The approval was based on interim efficacy and safety data from the ENSEMBLE phase III study on the vaccine candidate. Interim efficacy and safety data from the ENSEMBLE study showed that J&J’s
vaccine candidate was 66% effective
overall at preventing moderate-to-severe COVID-19, 28 days after vaccination. Importantly, the protection against severe disease was observed across geographies and against multiple rapidly emerging infectious virus variants, including the South African one.
Importantly, though
Pfizer
PFE
/BioNTech,
AstraZeneca
AZN
and
Moderna
’s
MRNA
COVID-19 vaccines have already taken the lead having delivered several million doses of their vaccines, J&J has a competitive advantage. Its vaccine is the only COVID-19 vaccine to be approved for single administration. Other approved vaccines globally, including Pfizer’s BNT162b2, Moderna’s mRNA-1273 and AstraZeneca C19VAZ are approved with two-dose dosing regimen separated by three/four weeks. A single dose will require lesser production, which is key when vaccines are in short supply. A single-dose vaccine also provides patient convenience.
The company is committed to supplying 200 million doses of the vaccine to Europe as well as Norway and Iceland in 2021. In the United States, J&J had an agreement to supply 100 million doses in the first half of 2021. The COVID-19 vaccine should thus contribute to sales growth in 2021.
Meanwhile, J&J’s Pharma segment is performing above-market despite currency headwinds and the impact of biosimilar and generic competition on sales of some key drugs like Remicade and Zytiga. Pharmaceutical segment sales rose 8.4% in 2020 on an organic basis despite the coronavirus pandemic. The sales increase is being led by the company’s oncology drugs, Imbruvica and Darzalex as well as psoriasis treatment, Stelara. Meanwhile, other core products like Stelara, Simponi/Simponi Aria and Invega Sustenna and new immunology medicine Tremfya and prostate cancer drug, Erleada are also contributing to growth. Importantly, J&J sounds confident about its Pharmaceutical business continuing to deliver above-market growth in 2021, supported by strong performance of key products such as Darzalex, Imbruvica, Tremfya, Stelara and Erleada due to increased penetration and new indications.
J&J is also making rapid progress with its pipeline and line extensions. Several pivotal data readouts are expected in 2021. The company is already having a relatively fruitful year in terms of positive pipeline and regulatory updates.
The FDA approved J&J’s pipeline candidate, ponesimod, an oral treatment for relapsing forms of multiple sclerosis (RMS) and J&J/Glaxo’s long-acting injectable regimen of Glaxo’s cabotegravir and J&J’s Edurant (rilpivirine) for HIV. The FDA also approved J&J’s Darzalex Faspro for the new indication, newly diagnosed light chain amyloidosis. Meanwhile, the European Commission has approved a label expansion of Spravato (esketamine) nasal spray
Conclusion
Undoubtedly, J&J faces its share of headwinds like generic competition and pricing pressure. It also faces numerous lawsuits, which allege personal injuries to patients caused by the use of its products. These lawsuits have resulted in uncertainties.
Nonetheless, continued above-market sales performance of its Pharmaceuticals and Consumer units, recovery in the Medical Devices unit, rapid progress with its pipeline and line extensions and sales contribution from its COVID-19 vaccine should keep the stock afloat in 2021.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
