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Will Johnson & Johnson's Vaccine Be Able to Compete?

By Brian Orelli, PhD and Keith Speights - Mar 11, 2021 at 5:11AM

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The lower efficacy with an easier dosing regimen puts the healthcare giant in a good position for initial vaccinations, but the vaccine's long-term potential remains in question.

Johnson & Johnson (JNJ 1.13%) is set to deliver 100 million doses of its coronavirus vaccine to the U.S. government in the first half of 2021. Beyond the initial investment, the prospects for the vaccine seem questionable, at least in the U.S. In this video from Motley Fool Live, recorded on March 1, contributors Brian Orelli and Keith Speights discuss the ins and outs of J&J's competition with other vaccine makers, both in the U.S. and globally.

Brian Orelli: Then Johnson & Johnson has some manufacturing challenges to tackle the ramp up production. But putting that aside, what do you think about the company's prospects to compete in the short-term with, let's say, the second half this year? Then again, same question, for the longer term.

Keith Speights: Yeah, I would say over the short term, for the second half of this year, they'll compete very well. They are expecting to deliver, I think around 20 million doses by the end of March. That's not a lot, but it'll help, but it's not a lot. But the company is saying that they expect to ship 100 million doses in the first half of 2021. So by the end of June, they expect to have shipped 100 million doses. That would meet their contractual requirement, by the way, with Operation Warp Speed. So they're going to sell those obviously. They've sold those. They've got the purchase order in hand for those 100 million doses and those will be out.

I don't think you're going to see the U.S. government come back and double their order with Johnson & Johnson for 2021. The reason why I don't think that's going to happen is they just don't need to. They already have deals in place with Pfizer (PFE -0.23%) and Moderna (MRNA 4.97%) for I think a total of 300 million doses each for those two vaccines. Assuming AstraZeneca's (AZN -0.18%) vaccine wins EUA, the government already has a 300 million doses deal in place with AstraZeneca. They also have a deal for a 100 million doses with Novavax, (NVAX 11.12%) assuming their vaccine gets EUA. Basically we are going to have more than enough doses for all Americans for this year with all of this. I don't think you're going to see a big boost in supply orders or anything for J&J this year.

Orelli: At least not with the United States.

Speights: At least not with the United States. Now, you're going to see J&J get more orders outside the U.S. because single dose vaccine that doesn't have ultra-cold storage requirements is going to be very attractive and they are selling it at cost, and so there'll be governments that will definitely want to order it. I just don't think you're going to see it in the U.S.

Now, beyond this year, that's where it gets interesting, I think. I think we will see the U.S. government begin to place some orders in the second half of 2021 thinking ahead for 2022, assuming that we're going to need some booster doses going forward. I think it's going to get into a real battle between these vaccines as to which one offers the most bang for the buck. Being a single dose vaccine that is effective, especially effective against severe cases of COVID-19, I think Johnson & Johnson has a pretty good future over the long run. I think a key though to Johnson & Johnson's ability, as well as these other companies will be how well can they keep up with new variants that could crop up in the future? Because I think that's going to be a big deal going forward.

Orelli: But I also wonder how well Johnson & Johnson's vaccine is going to work as a booster because it's delivered via adenovirus. Are we going to develop antibodies to that adenovirus? So they're going to have to maybe continue to develop new adenovirus vectors to deliver the new DNA from the coronavirus. I think that's going to be really challenging for them, because I could imagine a situation where the FDA, when you change the adenovirus, that might result in requiring a full study instead of just antibody study to see whether the new booster shot works.

Speights: I think you're right. I think Johnson & Johnson is going to have a steeper challenge than, say, Pfizer or Moderna would have, because with their messenger RNA vaccines, it's going to be pretty easy for them to develop new versions of their vaccines that fight new variance that crop up. So J&J will have a challenge there. It's not an insurmountable challenge, but that could be a factor going forward, let's say after 2022 particularly.

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Stocks Mentioned

Johnson & Johnson Stock Quote
Johnson & Johnson
$179.52 (1.13%) $2.01
Pfizer Inc. Stock Quote
Pfizer Inc.
$52.31 (-0.23%) $0.12
AstraZeneca PLC Stock Quote
AstraZeneca PLC
$65.95 (-0.18%) $0.12
Novavax, Inc. Stock Quote
Novavax, Inc.
$57.15 (11.12%) $5.72
Moderna, Inc. Stock Quote
Moderna, Inc.
$149.95 (4.97%) $7.10

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