You won't have a very difficult time identifying ways that Johnson & Johnson (NYSE:JNJ) is a leader. It's the largest healthcare company in the world with a market cap of close to $400 billion. J&J ranks near the top of three different healthcare segments -- pharmaceuticals, medical devices, and consumer health. 

Johnson & Johnson announced in March that it would invest more than $1 billion to develop a COVID-19 vaccine candidate. That amount is greater than the market caps earlier this year of some drugmakers that set out to develop novel coronavirus vaccines. But could giant Johnson & Johnson actually be an underdog in the COVID-19 vaccine race? 

Gloved hand holding syringe and COVID-19 vaccine bottle with scientists and a microscope in the background

Image source: Getty Images.

Way back in the pack

Johnson & Johnson originally planned to begin phase 1/2a clinical studies for its COVID-19 vaccine candidate Ad26.COV2-S in September. However, the company announced in June that it would be able to accelerate the schedule and instead start the early stage study in late July.

This was great news. And it resulted from strong preclinical data as well as lots of discussions with regulatory agencies. So where did that put J&J in the race to begin clinical trials for a coronavirus vaccine candidate? Certainly not in first place, but maybe second or third? Fourth, perhaps? Nope.

Assuming no other drugmaker starts its clinical testing ahead of J&J, the big healthcare company will be the 25th drugmaker to initiate clinical testing in humans of a COVID-19 vaccine candidate. That's right, 24 other vaccine candidates are ahead of J&J's Ad26.COV2-S.

Some of the leaders in front of J&J are big pharma companies that quickly established partnerships to develop COVID-19 vaccines, including AstraZeneca and Pfizer. Others are smaller biotechs such as Moderna and Novavax. All of them outmaneuvered the largest healthcare company in the world to advance to clinical testing sooner.

Advantages of being big and famous

This relatively sluggish start didn't prevent Johnson & Johnson from staying in the spotlight, though. When President Trump invited seven drugmakers to the White House to discuss the threat presented by COVID-19 in March, J&J was at the table.

In June, reports surfaced that Operation Warp Speed, the federal initiative established to accelerate COVID-19 vaccine development, had selected five experimental coronavirus vaccines to support. Again, Johnson & Johnson's vaccine candidate made the cut. J&J was picked by Operation Warp Speed while some smaller companies that already had candidates in clinical testing were left out.

It's not too surprising that J&J has been favored by the White House. As already mentioned, the company is the biggest in the business. Johnson & Johnson's brand and products are household names. There are advantages to being big and famous.

Underdog?

Johnson & Johnson could make up lost ground pretty quickly. Chief scientific officer Paul Stoffels said in the company's Q2 conference call earlier this month that talks are already under way with the National Institute of Health to start a phase 3 study ahead of the original schedule. He added that this late-stage study could begin in late September. That would put J&J only two months behind Moderna.

The company definitely has ample resources to scale up rapidly, too. J&J is aggressively expanding its manufacturing capacity with the goal to deliver more than 1 billion doses of its COVID-19 vaccine by the end of next year. 

That might not be as lucrative as it sounds. J&J has committed to selling its COVID-19 vaccine at cost during the global pandemic if it wins approval. The big healthcare stock probably wouldn't experience nearly as big of a jump as others if they win approval for their COVID-19 vaccines.

Also, many people probably don't realize how much of a relative newbie Johnson & Johnson is in the world of vaccine development. While the company has researched vaccines for years, it won its first major regulatory approval of a vaccine only a few weeks ago with European Commission approval for its Ebola vaccine.

It might be something of a stretch to view Johnson & Johnson as a true underdog in the race to develop COVID-19 vaccines. However, it's also a stretch to view the company as a leader in the race.