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Johnson & Johnson to Invest $1 Billion in COVID-19 Vaccine Development

By Cory Renauer - Mar 30, 2020 at 3:46PM

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The pharmaceutical giant is building capacity to produce 1 billion doses of an experimental vaccine before it even knows if the vaccine works.

The world's largest healthcare company didn't get this big by gambling, but it just made a huge bet on an experimental coronavirus vaccine. 

On Monday, Johnson & Johnson (JNJ 0.89%) selected a lead vaccine candidate for SARS-CoV-2, the novel coronavirus responsible for COVID-19, and announced it will rapidly create enough manufacturing capacity to deliver over 1 billion doses of it -- even though the vaccine won't be ready for human trials until September. 

In other words, the company's going to mass-produce the vaccine before it has evidence it works.

A COVID-19 sample

Image source: Getty Images.

A big deal

Normally, drugmakers wait for positive results from controlled clinical trials before they even think about breaking ground on facilities meant to mass-produce a potential new drug. Nonetheless, Johnson & Johnson and the Biomedical Advanced Research and Development Authority (BARDA) have committed more than $1 billion to co-fund development of this coronavirus vaccine candidate, and are scaling up facilities to produce it in quantity immediately. So there will be warehouses full of the vaccine candidate by the time the data reveals whether or not it successfully prevents COVID-19. 

If clinical trials succeed, Johnson & Johnson thinks the vaccine could be ready for emergency use in early 2021. Setting such a short timeline for a treatment any other indication would make analysts laugh, but the FDA has been willing to be flexible in regards to attempts to combat the COVID-19 pandemic.

The FDA recently granted its first emergency use authorizations for therapeutic products to treat hospitalized COVID-19 patients. The agency granted the authorization to two decades-old malaria drugs, despite sufficient data from studies with randomized control groups to show that the treatments are effective. 

Cory Renauer owns shares of Johnson & Johnson. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

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