Johnson & Johnson’s vaccine is less effective than its competitors. Here’s why he could still win big



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Johnson & johnson (NYSE: JNJ) is about to cross the finish line in the coronavirus vaccine race. But the cheering may not be as loud as it used to be for rivals Pfizer (NYSE: PFE) and Modern (NASDAQ: ARNM). This is because the large pharmaceutical company has reported lower efficacy than its earlier competitors in the market.

So that’s bad news … right? Not necessarily. First, we need to put the efficacy data into context. It means looking at how the coronavirus pandemic has evolved. New strains in the UK, Brazil and South Africa gained ground as the Johnson & Johnson trial unfolded. And second, we need to focus on the one big positive that could translate into major market share for Johnson & Johnson. Let’s take a closer look.

A doctor is preparing to vaccinate a patient with a vaccine against the coronavirus.

Image source: Getty Images.

Faced with new variants

When Pfizer and Moderna reported data late last year, we were looking to see if vaccine candidates could handle the original strain of coronavirus. Both were found to be over 94% effective. Johnson & Johnson – and others who report now and in the future – are in a different situation. Their vaccines also ran into new variants. But, like Pfizer and Moderna, these companies designed their vaccines to target the original virus. All of this means that you shouldn’t be surprised if its efficiency is lower than that of Pfizer and Moderna.

Johnson & Johnson’s trial covered multiple regions, and the company separated the effectiveness rates accordingly. This makes it easier to examine its performance against variants. The vaccine produced 72% effectiveness in the United States, 66% effectiveness in Latin America and 57% effectiveness in South Africa. New strains are multiplying in the United States. But the Brazilian strain has gained ground in Latin America. And the South African strain is originally from South Africa. This probably explains – at least somewhat – why the vaccine candidate has shown less efficacy in these areas.

Pfizer and Moderna recently tested their vaccines in vitro and said they could prevent the new strains. But we don’t have an efficacy reading from a clinical trial setting. This makes it difficult to perfectly compare the performance of Johnson & Johnson’s vaccines to that of Pfizer and Moderna in the current coronavirus situation.

So, let’s turn our attention to Johnson & Johnson alone. Considering the increase in variants during the pivotal trial period, I think the vaccine candidate produced decent results.

From “decent” to “strong enough”

But there is another part of the Johnson & Johnson vaccine that is particularly compelling: it only involves a single dose. Both Pfizer and Moderna vaccines are given in two doses. Novavax (NASDAQ: NVAX) A close market candidate is also a two-dose vaccine. This means that Johnson & Johnson produced these decent results with one hit. So instead of saying the results are “decent”, we might mean that they are pretty solid.

What is a single dose vaccine so great? For those of us who reach out, it means one uncomfortable blow instead of two. Most people would appreciate this. And it’s even better for governments and hospital systems. The supply and distribution of vaccines was problematic. Many people who have received a dose of the vaccine are concerned that more doses will arrive in time for the second vaccine. With a single dose vaccine, more people can be fully immunized with a given supply of the product. And of course, storage and transportation are also becoming more manageable.

Johnson & Johnson applied for an Emergency Use Authorization (EUA) on February 4. The company said it would be ready to dispense doses immediately following a possible EUA. If the company’s schedule resembles that of Pfizer and Moderna, its vaccine could be on the market as early as March.

A look to the future

Right now the world needs more doses than Pfizer, Moderna, and Johnson & Johnson could produce. All three can therefore prosper in this market. But later, once the pandemic is over, Johnson & Johnson’s single-dose vaccine could gain market share – and even become the market leader.

But this vaccine is not a makeshift product for Johnson & Johnson. The vast product line of this large pharmaceutical company generates billions of dollars in revenue each quarter. Still, the addition of a coronavirus vaccine is a bonus that investors will appreciate.



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