How Johnson & Johnson’s COVID-19 vaccine production issues and the federal “pause” over safety concerns weigh on investors’ minds when the company reports earnings next week?
The answer is probably not much, at least around this time.
Johnson & Johnson is expected to share its first quarter earnings on Tuesday morning. This is the first time the company has released earnings since its one-dose coronavirus injection received an emergency license in the US in February. (That said, sales of this injection have largely been out of analysts’ predictions since the vaccine was pre-purchased by governments.)
Shares of J&J JNJ up 0.4% in trading on Friday.
Here’s what investors will pay attention to:
Will J&J COVID-19 be restricted for use in a smaller group of people?
In a surprise move, the Centers for Disease Control and Prevention and the Food and Drug Administration on Tuesday suggest “pause” use of J&J vaccine until serious but extremely rare blood clots have been reported in six women who received this particular vaccine.
These six cases are among the 6.8 million people in the United States who have received the shot, meaning the chance of it happening is about one in every million shots, described as “less likely than you would get lightning strike. fight on. a certain year ” by New York City Health Commissioner Dave Chokshi.
A CDC advisory committee voted this week to extend the pause as they gather more information on the cases, although analysts say now they want the footage to be limited to use in adults over 50 years old. The Next emergency meeting CDC advisory committee to discuss what happens next with J&J vaccines scheduled for Friday, April 23.
The pause can damage the belief – even temporarily – in vaccines, with recent poll A survey conducted by The Economist and YouGov found that only 37% of respondents believed that the J&J vaccine was safe after pausing, compared with 52% before the pause.
The pause also has an immediate, though not long-term, impact on stocks.
“JNJ shares have come under pressure from this news,” said SVB Leerink on Tuesday. “However, there was no significant impact on the income or the reduced risk for the tutorial.”
The company’s shares closed on Tuesday at $ 158.48 with high volume – trading volume that day was three times higher than the previous day. This is a sharp drop from the stock price that closed at $ 165.01 on March 30, the day before the company confirmed its vaccine blend production at a Level JSC. save Biosolutions Inc.
How J&J will solve the production problems
On March 31, Johnson & Johnson confirmed that a batch of vaccine produced by iprisent, the US manufacturing partner, does not meet quality standards, and that their staff will currently oversee production at that facility.
As of April 3, the company said it still expects to deliver about 100 million doses of the vaccine to the US government on June 1.
Biden administration officials have also sought to reassure the public that other vaccines are available at this time, including the mRNA vaccine by Pfizer Inc. develope.
and Moderna Inc.
This could also put pressure on the stock if market share is expected to be lost.
How the rest of the company’s health portfolio performed during the first quarter
Since J&J’s business involves a number of different components of the healthcare system, its earnings performance is often considered an instruction for other companies to report earnings at later dates. .
J&J has three main business units: sales of medical equipment, marketing of surgical products such as hip and knee implants; Its drug business, including vaccines and its best-selling product, the psoriasis drug Stelara, generated revenue of $ 7.7 billion by 2020; and its consumer business, which sells everything from baby shampoos to Neutrogena cleansers.
First quarter medical sales in the United States tended to be less active as the number of people doing the deduction plans started again on January 1 and was less likely to incur additional costs in the first part of year. This particular quarter also faces a tough comparison with the first quarter of last year, where COVID-19 is a growing concern but the majority of state lockout orders are still in effect.
SVB Leerink’s Geoffrey Porges told investors in an April 16 note about the industry. “Demand for most specialty products has recovered significantly from the effects of COVID at initiation, transfer and re-treatment but in many cases there will still be a lack of previous COVID levels.”
What will happen on Tuesday:
Income: Analysts tracked by FactSet expect that J&J earned $ 2.34 a share in the first quarter of 2021, up from $ 2.30 a year earlier.
Estimize, estimated by sources from a variety of parties, including buyer and seller analysts, money managers, academics, etc., is expected to have an EPS of $ 2.40.
Revenue: The FactSet consensus predicts $ 22.0 billion in revenue for the first quarter of the year, up from $ 20.7 billion for the same quarter a year ago. This will include $ 200 million revenue for COVID-19 vaccine for the quarter, with a total of $ 4.4 billion projected sales for 2021.
Stelara is expected to generate around $ 2.2 billion in revenue this quarter, up from $ 1.8 billion in the first quarter of 2020, with total pharmaceutical sales reaching $ 12.1 billion. in Q12021, compared with $ 11.1 billion in Q1 2020.
Estimize forecast revenue of 22.5 billion USD.
Shares of J&J rose 1.9% for the year, while the Dow Jones industrial average
has increased by 10% and the S&P 500 is wider
has increased 9.8%.