Please ensure Javascript is enabled for purposes of website accessibility

Johnson & Johnson Is Racing Against Time to Develop the First Coronavirus Vaccine

By Rachel Warren - Feb 11, 2020 at 4:25PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In the bid against other big pharma players to be the first to launch the coronavirus vaccine, Johnson & Johnson just announced a new collaboration that will double its efforts.

Over the past several weeks, there's nothing that has monopolized the news quite so much as the terrifying and deadly coronavirus. The illness has claimed over 1,000 lives at the time of this writing and has infected just over 43,000 individuals worldwide. 

At the end of January, the World Health Organization (WHO) declared the virus a global emergency. On February 2, the U.S. Department of State raised its travel advisory for China to a Level Four. A Level Four advisory is the highest warning issued and indicates that Americans should not under any circumstances travel to a country due to the extreme peril involved. 

Doctor holding a heart shaped object

Image Source: Getty Images

In the wake of the coronavirus pandemic that has already swept across Asia, Europe, North America, and the Middle East, big pharma companies including Gilead Sciences (GILD 0.90%), Novavax (NVAX -8.57%), and Johnson & Johnson (JNJ 1.75%) have been scrambling to respond. 

Johnson & Johnson is going head to head with these companies and others to be the first to develop the coronavirus vaccine and it looks like the company is well on its way to achieving its goal. If Johnson & Johnson succeeds in creating the coronavirus vaccine, this may not only save countless lives but also mean billions of dollars of revenue for the company that would see investor holdings soar. 

Here's the latest investor update to start off the new week.

Combining forces with subsidiary Janssen Pharmaceuticals 

Johnson & Johnson has declared that it is combining forces with its Belgium-based subsidiary Janssen Pharmaceuticals to create a preventative coronavirus vaccine. The companies will also be teaming up with outside laboratories to assess prospective antiviral drug solutions. 

Johnson & Johnson's Chief Scientific Officer and Vice Chairman of the Executive Committee, Dr. Paul Stoffels stated, "We are collaborating with regulators, healthcare organizations, institutions and communities worldwide to help ensure our research platforms, existing science and outbreak expertise can be maximized to stem this public health threat."

The collaboration of Johnson & Johnson with Janssen could speed up the vaccine development timeline by leaps and bounds and on a far larger scale. Janssen's AdVac platform will play a key role in this new development phase. The platform has already proven successful in the company's formulation of clinical candidates to treat HIV as well as an experimental Ebola drug that has been implemented in parts of Africa, including Rwanda. 

The competition is steep, but Johnson & Johnson is coming from a position of strength

Investors have been more than a little concerned since the outbreak of the coronavirus, as indicated by the increased volatility in the stock market of late. With so many contenders rushing to break out the coronavirus vaccine, many investors are wondering just where they should be putting their cash. 

It's no secret that Johnson & Johnson isn't alone in the race to get the first coronavirus vaccine from the lab to the consumer populace. Novavax previously developed vaccines for a few variations of the coronavirus, including SARS. While none of these vaccines have been approved by the FDA, this definitely puts Novavax ahead of the curve, and the company's shares have been soaring accordingly.

Gilead Sciences is another major player going neck in neck with Johnson & Johnson. The company's Ebola drug, Remdesivir, which has yet to receive regulatory approval, is now officially being tested by China to treat coronavirus patients. But only time will tell whether the drug has any efficacy to treat the coronavirus. 

Johnson & Johnson has also gifted a drug for China to use in its research efforts: the company's HIV medication Prezcobix. A recent statement released by Johnson & Johnson stated the following, "The company has a long-standing commitment to fight emerging epidemics. We stand ready to support global efforts where it may make a difference...We have established technologies and facilities that enable us to create, test and scale up production for potentially transformational vaccines. Our experience in helping to address epidemics, coupled with our expertise in respiratory illnesses, uniquely positions us to address the latest coronavirus outbreak."

Johnson & Johnson's new collaboration with Janssen Pharmaceuticals is an unprecedented move to push the coronavirus vaccine development timeline forward. It's clear that the competition is steep, but there's no reason to think that Johnson & Johnson isn't up to the task to lead the pack in rolling out the coronavirus vaccine.

Johnson & Johnson is unequivocally coming from a position of strength. The company had a fantastic year earnings-wise, with sales totaling roughly $20 billion per quarter over the trailing twelve months. Its profit margin exceeded 18% in 2019, and sales are projected to grow by as much as 5% in 2020. 

Johnson & Johnson's diversified business model continues to make it a profitable buy for long-term investors regardless of whether it wins the coronavirus vaccine race or not. However, if the company does become one of the first to release a coronavirus vaccine, as it very likely may, Johnson & Johson's financial future may look very bright indeed. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$176.98 (1.75%) $3.04
Gilead Sciences, Inc. Stock Quote
Gilead Sciences, Inc.
GILD
$63.84 (0.90%) $0.57
Novavax, Inc. Stock Quote
Novavax, Inc.
NVAX
$53.42 (-8.57%) $-5.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/23/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.