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J&J (JNJ) CEO Alex Gorsky to Resign, Joaquin Duato to Succeed

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J&J (JNJ - Free Report) announced that its present chairman and chief executive officer (CEO), Alex Gorsky is stepping down. Joaquin Duato, currently vice chairman of the company’s Executive Committee, will succeed him, effective Jan 3, 2022. Duato will subsequently also join the board of directors. Alex Gorsky, will however, continue to serve as the executive chairman of the company.

Gorsky has led this massive drug and medical device company for almost a decade, having taken up the job of CEO and chairman in 2012. In all these years, the company’s R&D spend has increased more than 60%, making J&J one of the pharma companies with the largest R&D budget. Based on 2021 guidance, J&J’s earnings growth has increased by approximately 85% during his tenure. The largest merger and acquistion deal in his tenure was that of Swiss biotech Actelion for $30 billion in June 2017, which diversified its revenues in the pulmonary arterial hypertension category. He also played an instrumental role in transforming J&J’s Medical Devices segment and shaping the Consumer Health unit. During Gorsky’s tenure, J&J’s share price increased by more than 170%. Most importantly, he oversaw the development and launch of J&J’s single-shot vaccine for COVID-19.

However, during his tenure, J&J has been involved in some of the biggest legal issues like allegations over its baby powders contain asbestos, which caused many women to develop ovarian cancer, and its opioid-based drugs, which allegedly contributed to the state’s opioid epidemic. It will be interesting to see where Duato takes J&J from here.

This year so far, J&J’s shares have risen 13.4% compared with an increase of 18.4% for the industry.

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In a separate press release J&J announced data from a cohort of the phase I study CHRYSALIS, evaluating its lung cancer drug Rybrevant (amivantamab) for the treatment of non-small cell lung cancer (NSCLC) for patients with MET exon 14 skipping mutations. The data demonstrated that the drug shows anti-tumor activity against MET-mutated NSCLC. Partial responses were observed in 64% of the 14 response-evaluable patients in the study with four patients pending confirmation.

Rybrevant was approved in May for NSCLC that targets EGFR exon 20 insertion mutations in the United States based on data from another cohort of the same study.

J&J currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks from the biotech sector include Horizon Therapeutics (HZNP - Free Report) , Regeneron (REGN - Free Report) and Repligen Corporation (RGEN - Free Report) . While Regeneron and Horizon Therapeutics sport a Zacks Rank #1, Repligen has a Zacks Rank of 2.

Horizon Therapeutics’ earnings estimates have increased from $3.62 to $4.46 per share for 2021 and from $5.18 to $5.84 per share for 2022 in the past 30 days. The stock has risen 41.2% so far this year.

Regeneron’s earnings per share estimates have moved north from $50.03 to $54.15 for 2021 and from $40.91 to $44.11 for 2022 in the past 30 days. The stock has risen 35.5% so far this year.

Repligen’s earnings per share estimates have risen from $2.26 to $2.76 for 2021 and from $2.57 to $3.02 for 2022 in the past 30 days. The stock has risen 35.5% so far this year.