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J&J (JNJ) Outperforms the Industry Year to Date: Here's Why
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Among the large drugmakers, Johnson & Johnson’s(JNJ - Free Report) stock is up 2.0% so far this year against 0.6% decrease of the industry.
Here we discuss the reasons.
Success With COVID-19 Vaccine
A prime reason for the rise in J&J’s share price this year is the successful development of its single-shot vaccine to prevent COVID-19.
Last month, the FDA granted Emergency Use Authorization (EUA) to its single-dose COVID-19 vaccine candidate. TheEuropean Commission granted Conditional Marketing Authorization (CMA) to the vaccine 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% effectiveoverall 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.
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.
Importantly, though Pfizer (PFE - Free Report) /BioNTech, AstraZeneca (AZN - Free Report) and Moderna’s (MRNA - Free Report) COVID-19 vaccines have taken the lead with the companies already delivering 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.
Also, J&J’s vaccine can be stored at much warmer temperatures than the Pfizer/Moderna ones.
Positive Pipeline Developments
The company is already having a relatively fruitful year in terms of positive pipeline and regulatory updates.
The FDA approved J&J/Glaxo’s long-acting injectable regimen of Glaxo’s cabotegravir and J&J’s Edurant (rilpivirine) for the treatment of HIV-1 infection in virologically suppressed adults. The FDA also approved J&J’s Darzalex Faspro for new indication, newly diagnosed light chain amyloidosis. Meanwhile, the European Commission has approved a label expansion of Spravato (esketamine) nasal spray.
Strong Fourth-Quarter Results
J&J announced strong fourth-quarter results in January, which also gave an impetus to the stock. J&J beat fourth-quarter estimates for earnings as well as sales. Its Pharmaceuticals unit performed well, supported by successful label expansion of blockbuster drugs, Imbruvica, Darzalex and Stelara.Further, increasing demand for its Consumer Health products and continued procedure recovery in Medical Devices provided top-line support. Importantly, J&J’s guidance for 2021 topped investor expectations.
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.
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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J&J (JNJ) Outperforms the Industry Year to Date: Here's Why
Among the large drugmakers, Johnson & Johnson’s(JNJ - Free Report) stock is up 2.0% so far this year against 0.6% decrease of the industry.
Here we discuss the reasons.
Success With COVID-19 Vaccine
A prime reason for the rise in J&J’s share price this year is the successful development of its single-shot vaccine to prevent COVID-19.
Last month, the FDA granted Emergency Use Authorization (EUA) to its single-dose COVID-19 vaccine candidate. TheEuropean Commission granted Conditional Marketing Authorization (CMA) to the vaccine 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% effectiveoverall 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.
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.
Importantly, though Pfizer (PFE - Free Report) /BioNTech, AstraZeneca (AZN - Free Report) and Moderna’s (MRNA - Free Report) COVID-19 vaccines have taken the lead with the companies already delivering 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.
Also, J&J’s vaccine can be stored at much warmer temperatures than the Pfizer/Moderna ones.
Positive Pipeline Developments
The company is already having a relatively fruitful year in terms of positive pipeline and regulatory updates.
The FDA approved J&J/Glaxo’s long-acting injectable regimen of Glaxo’s cabotegravir and J&J’s Edurant (rilpivirine) for the treatment of HIV-1 infection in virologically suppressed adults. The FDA also approved J&J’s Darzalex Faspro for new indication, newly diagnosed light chain amyloidosis. Meanwhile, the European Commission has approved a label expansion of Spravato (esketamine) nasal spray.
Strong Fourth-Quarter Results
J&J announced strong fourth-quarter results in January, which also gave an impetus to the stock. J&J beat fourth-quarter estimates for earnings as well as sales. Its Pharmaceuticals unit performed well, supported by successful label expansion of blockbuster drugs, Imbruvica, Darzalex and Stelara.Further, increasing demand for its Consumer Health products and continued procedure recovery in Medical Devices provided top-line support. Importantly, J&J’s guidance for 2021 topped investor expectations.
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.
J&J currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>