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Why Johnson & Johnson Is Trashing 60 Million Doses of Its COVID Vaccine

By Keith Speights and Brian Orelli, PhD - Jun 29, 2021 at 7:01AM

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The saga continues at a facility owned by one of J&J's contractors.

Johnson & Johnson (JNJ -0.83%) hasn't become the major player in the COVID-19 vaccine market that many expected it to be, in large part because of manufacturing issues at a contractor's facility. Now, those issues have become even worse, and the Food and Drug Administration has told the healthcare giant that it must discard 60 million doses of its COVID-19 vaccine. 

In this Motley Fool Live video recorded on June 16, 2021, Motley Fool contributors Keith Speights and Brian Orelli discuss why J&J is having to dump these vaccine doses.

Keith Speights: On another COVID news front, the FDA is making Johnson and Johnson (JNJ -0.83%) trash -- totally throw away -- 60 million doses of its COVID -19 vaccine. Now, this is on top of 15 million doses that had to be discarded earlier this year.

Brian, what's going on here? How does this impact Johnson and Johnson, and how does it impact the COVID vaccine market in general?

Brian Orelli: This goes back to the contamination issues with Johnson and Johnson's vaccine and AstraZeneca's vaccine. They were at a shared contract manufacturer, Emergent BioSolutions (EBS -0.81%), and somehow there was contamination between the two vaccines.

Reportedly there's 100 million doses of Johnson and Johnson's vaccine in limbo. Sixty million of those were thrown away, but there's still more that could potentially be thrown away. Apparently, there's 10 million doses that will be released, but they'll have the caveat that the FDA won't guarantee that the good manufacturing practices were actually followed for those 10 million doses.

The reporting also says that AstraZeneca still has maybe 70 million doses in limbo. It's probably not as big of an issue for AstraZeneca, because they don't have U.S. authorization yet.

Back to Johnson and Johnson. I'm not sure if it's that big of a deal. I imagine Emergent BioSolutions is going to take a financial hit on the throwing away of the vaccine. They'll eventually get authorized, I think, to ship the vaccine out of the plant.

At some point, Johnson and Johnson is going to get paid under its contract with the U.S. government. But future sales are more in doubt just because Johnson and Johnson's vaccine isn't getting used nearly as much as the mRNA vaccines are. I'm not sure the trashed doses are going to affect the vaccine's prospects in the long term.

Speights: It's a big number when you hear it, 60 million doses. But in the big scheme of things really it doesn't change much at all for probably any of these companies, except perhaps Emergent BioSolutions. The ticker there's EBS, and they've really gotten a black eye out of this entire fiasco.

Brian Orelli, PhD has no position in any of the stocks mentioned. Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends Emergent BioSolutions and Johnson & Johnson. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$166.18 (-0.83%) $-1.40
AstraZeneca PLC Stock Quote
AstraZeneca PLC
AZN
$66.21 (-0.32%) $0.21
Emergent BioSolutions Inc. Stock Quote
Emergent BioSolutions Inc.
EBS
$28.20 (-0.81%) $0.23

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