Johnson & Johnson’s Numbers Expected to Remain Strong Despite COVID-19 Vaccine Clinical Trial Pause

By Thomas Price Wednesday, October 14, 2020

With so much hope pinned on the potential vaccine candidates that could help quell the COVID-19 pandemic, any news on the different trials creates a significant reaction. With Johnson & Johnson announcing a pause of their Phase 3 COVID-19 vaccine trials, the market, along with many people, reacted quite negatively, outweighing a rather positive Q3 earnings report from the company and the relative normality in which trials for new vaccines are put on temporary pauses. However, given the situation, what exactly is the reason behind the pause, when can the trials resume, and will the strong quarterly report for Johnson & Johnson help bump back their stock shares?

Paused Phase 3 Trials

As of October 13th, Johnson & Johnson has paused all dosing for their COVID-19 pandemic. The reason provided by the company is that the trial was paused due to one of the study participants contracting an unexplained illness. While this news was shocking to much of the world, pauses in large-scale vaccine trials happen quite often, and this is nothing out of the ordinary. In fact, a very similar situation happened with a different COVID-19 vaccine trial run by AstraZeneca, with a study participant of their own coming down with an unexplained illness causing a pause in the trial. The stock market again reacted irrationally, with the company’s shares dropping by 6% in a day due to the news. However, within less than two months, AstraZeneca has already resumed trials in Japan, the United Kingdom, India, and South Africa. The notable exception to that list, however, is the United States, where trials remain paused until further notice. Another similar situation arose on the same day involving the Eli Lilly antibody treatment, which had recently requested the FDA approve their drug for emergency use in patients, pausing their own trials due to a potential safety concern.

Based on similar circumstances in terms of size and even vaccine focus of AstraZeneca, the public can expect Phase 3 trials for Johnson & Johnson to resume sooner rather than later. Despite that precedent set earlier this year, investors notably panicked with Johnson & Johnson. In fact, the company saw its shares drop by 2.29%. The brunt of the drop was curbed at least slightly by the expectation of beating the quarterly report the company put out on the same day.

Johnson & Johnson Quarterly Report

Johnson & Johnson’s Q3 report beat most all expectations and laid out a promising future for the company despite their dip in the market on the day it was released. The adjusted earnings per share stood at $2.20, beating out market expectations of close to $1.98 per share. The company’s overall revenue came out to $21.08 billion, which, again, was an extremely positive number. Johnson & Johnson outperformed to an appreciable degree compared to projections, which stood at $20.2 billion, and even the same quarter last year, where they earned $20.72 billion. The company has also raised its full year sales forecast range from between $79.9 billion and $81.4 billion, up to a range of $82 billion to $82.8 billion. Breaking it down by division, the company’s consumer unit earned $3.5 billion, which is a 1.3% rise from 2019. As for their medical unit, the company generated $6.1 billion, which marks a 1.7% rise compared to 2019. Market reactivity prevented these promising numbers from resulting in a strong boost in share prices, but future outlooks on the company remain positive.

Final Conclusions

Vaccine and treatment paused in trials are extremely common. In fact, the many companies who have paused their trials - even as the world waits on - show the abundance of caution and care put into what is being created here. With so much pressure to approve a vaccine, and especially be the first to do so, it could be assumed that small safety concerns would be pushed aside in order to achieve this goal. However, what the major companies have shown time and time again, is that the safety and efficacy of the vaccine are the number one priority. While it may panic investors in the short term, alongside positive quarterly reports, Johnson & Johnson could potentially earn even more money because of their caution here instead of recklessness.

About the Author

Headshot of Thomas Price

Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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