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It will be several days at a minimum before Johnson & Johnson can provide more details on the unexpected illness in a high-profile Phase III trial for its COVID-19 vaccine candidate, Janssen Global Head of R&D Mathai Mammen said during the company's third quarter sales and earnings call on 13 October.

The quarterly financial call occurred the morning after news broke that J&J was pausing enrollment in its Phase III ENSEMBLE trial due to an unexpected illness.  (Also see "Coronavirus Update: J&J Pauses COVID-19 Vaccine Trial After Unexplained Illness" - Scrip, 13 Oct, 2020.) The case is being reviewed by the trial's independent Data Safety Monitoring Board (DSMB), and J&J remains blinded to the information, so there simply is not much more information the company could provide.

Mammen, for example, confirmed that the company still does not know if the unexpected illness occurred in the placebo arm or vaccine arm of study.

"We know very little at this point and it'll be a few days at minimum for the right set of information to be gathered and evaluated," he stated. J&J followed the process it has in place for pausing enrollment after the company was informed of the incident on the evening of 11 October.

"The DSMB was informed immediately on Sunday, and they've requested additional information," Mammen said. "We're now awaiting further medical information and evaluation, which we will then forward to the DSMB for their independent recommendation."

Investors and the general public are closely watching the vaccine trial because it is likely several vaccines may be needed to provide adequate supply to end the global pandemic caused by COVID-19. J&J's vaccine candidate has one potential benefit as well over the others in late-stage clinical trials in that it is being tested as a single shot versus a two-dose regimen. (Also see "J&J COVID Vaccine: Single-Dose Format Will ‘Expedite’ Phase III Trial" - Pink Sheet, 23 Sep, 2020.)

With J&J's trial on pause, it means that only Pfizer Inc. and Moderna, Inc. are continuing with their respective Phase III trials in the US, as AstraZeneca PLC's trial has also been paused in the US over an adverse event. (Also see "Coronavirus Update: Trump Tests Positive, US Pause Remains On AstraZeneca Vaccine" - Scrip, 2 Oct, 2020.) One issue that has raised some concern is that both the J&J and AstraZeneca vaccines are adenovirus-based vaccines.

"This event could have significant negative impact (increased regulatory scrutiny, less consumer confidence, etc.) for all other viral vector vaccines if proven to be associated with vaccination, in our view," SVB Leerink analyst Geoffrey Porges warned in a same-day research note.

J&J and industry observers have cautioned that pauses in clinical trials are common and as Mammen reiterated, serious adverse events "may have something or nothing to do with the drug or vaccine being investigated." He said J&J plans to resume the trial as soon as the case is investigated, targeting a patient enrollment of 50,000. The trial enrolled the first patient on 23 September.

2021 Forecast For Growth

With little more to say on the COVID-19 vaccine front, J&J provided some early outlook for 2021 following the challenging year of 2020, when the company's medical device business was heavily impacted by medical procedure delays caused by COVID-19 and pharmaceuticals also faced headwinds.

J&J said it expects solid volume-driven, above-market growth in 2021, driven by the pharmaceutical segment, which is expected to continue growing. Year-over-year earnings per share are also expected to be strong, chief financial officer Joseph Wolk said, partly due to the dynamics in 2020 but also due to the strength of the business.

Worldwide chairman-Pharmaceuticals Jennifer Taubert commented that "the fundamentals of [the pharmaceuticals] business remain strong and we feel confident in our ability to grow above the market on a full year basis in 2020."

The third quarter was J&J's tenth consecutive quarter of pharmaceutical sales of more than $10bn and second of more than $11bn, she noted. Pharmaceutical revenues grew 5% to $11.42bn in the third quarter, helping to fuel consolidated sales growth of 1.7% to $21.08bn. The segment was impacted by headwinds from COVID-19, however, caused by delays in diagnosis and slower patient starts. The immunology franchise was the most impacted, including Stelara (ustekinumab) and Tremfya (guselkumab), the firm said.

The US business was more heavily impacted, with US pharmaceutical sales up 1.5%, while sales outside of the US increased 9.7% on a reported basis.

"Seven of our key brands grew at double-digit rates," Taubert said, referring to Darzalex (daratumumab), Imbruvica (ibrutinib) and Erleada (apalutamide) in oncology, Stelara and Tremfya in immunology and Opsumit (macitentan) and Uptravi (selexipag) in pulmonary hypertension.

J&J's growth forecast for 2021 is based on volume growth, not price, Taubert added.

"Whether it's based on unemployment trends or whether it's based on health care reform, we do see continued pressure on pricing across the industry," she said. "We think, relative to our competitive set, that we are very well positioned for this future environment."

J&J also disclosed in a separate statement that the company will put an additional $1bn toward a settlement to resolve opioid lawsuits filed by states, cities, counties and tribal governments. J&J has now put $5bn towards an agreement in principle with a committee of state attorneys general in 2019.

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