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When Will Johnson & Johnson Start to Profit From Its COVID Vaccine?

By Adria Cimino and Corinne Cardina - Apr 2, 2021 at 8:00AM

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The answer depends on how today's vaccines handle the pandemic.

In this Motley Fool Live video recorded on March 26, healthcare and cannabis bureau chief Corinne Cardina and contributor Adria Cimino discuss the coronavirus vaccine profit prospects of Johnson & Johnson (JNJ -0.09%). The company has pledged to sell the vaccine without taking a profit during the pandemic.

Corinne Cardina: Let's dive into Johnson & Johnson. Johnson & Johnson, like AstraZeneca, has pledged not to profit from the vaccine during the pandemic. It doesn't mean it's giving away the vaccine for free. It means that it's selling the doses it's making at the cost that it takes to produce them. At what point might they start to profit? They can say, at this point, if this happens, the pandemic is under control or over. Why are some analysts actually seeing the vaccine as a positive for Johnson & Johnson stock, given that they're selling it at cost?

Adria Cimino: Well, as far as the analysts, I think just the idea of getting increased revenue, the idea that it's showing that people are interested in this vaccine and people are ordering, countries are ordering it. I think that's a positive. They see that, really, a lot of people ordering the vaccine are interested. The idea is that then once the company does take a profit, there will be more of these orders that governments will say, we really like this vaccine, we're going to order more of it. It's like a positive sign, even though financially, we're not seeing the results of that right away. As far as the pandemic, the profit will come probably in the next, maybe in the next round of vaccination. Of course, that will depend on how we do with the pandemic. That could be if we can get it under control and they say, well, it's no longer a pandemic a year from now, then the company can start profiting. That's a possibility. It could be as soon as next year. Otherwise, we probably have to wait an additional year, but it will be in probably the next round of vaccination or a little bit farther down the road.

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Johnson & Johnson Stock Quote
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AstraZeneca PLC
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