Johnson & Johnson (NYSE: JNJ) is about to cross the finish line for the coronavirus vaccine. But cheering may not be as loud as opponents Pfizer (NYSE: PFE) and Modern (NASDAQ: MRNA). This is because the large pharmaceutical company reported the efficiencies that weakened those of those who were on the market earlier.
So this is bad news … right? Not necessarily. First, we need to put the effectiveness data into context. This means watching the coronavirus pandemic develop. New tribes in the United Kingdom, Brazil and South Africa gained ground when Johnson & Johnson’s trial unfolded. And second, we need to focus on the one big positive thing that could result in a huge market share for Johnson & Johnson. Let’s take a closer look.
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Facing new variants
When Pfizer and Moderna reported data last year, we looked at whether the candidates for the vaccine could handle the original strain of the coronavirus. Both were over 94% effective. Johnson & Johnson – and others reporting now and in the future – are in a different situation. Their vaccines are also available against the new variants. But like Pfizer and Moderna, these companies have designed their vaccines to target the original virus. All this means that we should not be surprised if its efficiency is lower than that of Pfizer and Moderna.
Johnson & Johnson’s trial spanned different regions, and the company separated efficiency figures accordingly. This makes it easier to examine its performance against variants. The vaccine produced 72% in the US, 66% in Latin America and 57% in South Africa. New tribes are increasing in the US. But the Brazilian tribe has gained ground in Latin America. And the South African tribe has its origins in South Africa. This probably explains – at least to some extent – why the vaccine candidate showed lower efficacy in those areas.
Pfizer and Moderna recently tested their vaccines in vitro, saying they can prevent the new strains. But we do not have an effectiveness from a clinical trial. This makes it difficult to perfectly compare the vaccine performance of Johnson & Johnson with that of Pfizer and Moderna in the current coronavirus situation.
So let’s just refocus on Johnson and Johnson. Considering the increase in variants during the central trial, I think the vaccine candidate yielded proper results.
From “decent” to “fairly strong”
But there is another element of the Johnson & Johnson vaccine that is particularly compelling: it involves only one dose. The Pfizer and Moderna vaccines are administered in two doses. Novavax’s (NASDAQ: NVAX) closer to the market candidate is also a two-dose chance. This means that Johnson & Johnson delivered these decent results with just one stitch. So, instead of saying that the results are “decent”, we might want to say that they are pretty strong.
What’s so great about a single dose vaccine? For those of us who hold out an arm, it means one awkward jerk instead of two. Most people will appreciate it. And it’s even better for governments and hospital systems. Vaccination and distribution of vaccines was a problem. Many people who have received one dose of vaccine are concerned that more doses do not arrive in time for the second admission. With a single-dose vaccine, more people can be vaccinated with a given stock of products. And of course, storage and transportation are also easier to tackle.
Johnson & Johnson applied for emergency permit (EUA) on February 4th. The company said it would be ready to distribute doses immediately to a possible EUA. If the company’s timeline has something like that of Pfizer and Moderna, its vaccine could be on the market as early as March.
A look into the future
Right now, the world needs more doses than Pfizer, Moderna and Johnson & Johnson could deliver. All three can therefore thrive in this market. But along the way, once the pandemic is over, Johnson & Johnson’s single-dose vaccine could gain market share – and even become the market leader.
But this vaccine is not a make-it-or-break-it product for Johnson & Johnson. This large pharmaceutical company’s wide range of products generates billions of dollars in revenue every quarter. Nevertheless, the addition of a coronavirus vaccine is a bonus that investors will appreciate.