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J&J reported steady Q3 sales growth(Source:Alamy)

Johnson & Johnson expects to transition its COVID-19 vaccine into a more traditional commercial product in late 2022 or early 2023 as the focus of vaccine administration turns more to boosters, exec VP and worldwide chair of pharmaceuticals Jennifer Taubert said in releasing the firm’s third quarter results.

J&J committed to selling the vaccine on a not-for-profit basis during the pandemic phase of the health crisis, even as some of its peers – namely Pfizer Inc./BioNTech SE and Moderna, Inc. – are profiting off the blockbuster-sized sales of their mRNA-based vaccines. (JJ Q1 Financials Are All About COVID19 Progress And Impact)

"I know our R&D team is gearing up to file for full approval," she told the company's third quarter sales and earnings call on 19 October. "I think we want to be moving into a full approval market for that switchover to commercial."

J&J's COVID-19 vaccine is currently being administered under an Emergency Use Authorization by the US Food and Drug Administration and under a Conditional Marketing Authorization in Europe.

Although J&J's vaccine was initially developed to be a single shot, FDA's Vaccines and Related Biological Products Advisory Committee (VRBPAC) unanimously recommended an EUA for a booster dose in adults 18 and older at least two months following the initial vaccination, after a trial showed strong efficacy supporting a second dose. (Janssen Gets US FDA Panel Nod For Additional COVID Vaccine Shot But Is It A Booster)

"We are in the process right now of continuing, under Emergency Use Authorization, to roll out our vaccine across the globe, both developed markets as well as developing markets," Taubert said. "As we continue to work through and fulfill our existing contracts that we have throughout the globe and as we move into more of a booster market in later 2022 potentially into 2023, we'd be looking at moving into more of a commercial market."

Chief financial officer Joseph Wolk said investors should think of the vaccine as upside to J&J’s base business. "The strength of our business is really in our pharmaceutical, medical device and consumer," he said. 

The company generated $522m from sales of the vaccine in the quarter and $766m in the first half of the year. Management previously forecast revenues of $2.5bn from the vaccine this year, with the bulk hitting the top-line later in the year. (JJs COVID19 Vaccine On Track To Generate 25bn This Year) In comparison, Pfizer has forecast $33.5bn in revenue from its vaccine this year. 

Pharma Drives Top-Line Growth

J&J is in the middle of a big leadership transition, with CEO Alex Gorsky and chief scientific officer Paul Stoffels both stepping down at the end of the year after a long tenure. (JJs Longtime RD Head Stoffels To Retire Raising The Leadership Transition Stakes) Vice chairman Joaquin Duato has been appointed to take over as CEO but no successor was named for Stoffels. (JJ CEO Gorsky Handing Over The Reins To Vice Chairman Duato) None of those leaders were on the third quarter call, so investors will have to wait to hear more from them directly. J&J will hold an investor event highlighting the pharmaceutical business unit on 18 November that will feature both the incoming and outgoing CEO.

The company demonstrated steady growth in the third quarter, coming from all three of its business divisions led by pharmaceuticals – its largest business. Consolidated revenues increased 10.7% over the prior-year quarter to $23.34bn. Pharmaceutical revenues grew 13.8% to $12.99bn.

Pharma revenue was driven by strong sales of Darzalex (daratumumab) for multiple myeloma, Stelara (ustekinumab) for psoriasis and other immune disorders, Tremfya (guselkumab) for plaque psoriasis and psoriatic arthritis, and Erleada (apalutamide) for prostate cancer.

Sales of Imbruvica (ibrutinib) for chronic lymphocytic leukemia and other cancers continued to face headwinds, most notably in the US where sales declined 8.3% to $413m in the quarter. On a worldwide basis, sales grew 3.5% to $1.07bn. J&J said that the category was constrained because of the impact of COVID-19 on new patient starts, and while Imbruvica remains the US market leader in the category, it has lost market share. AstraZeneca PLC's Calquence (acalabrutinib) was approved by the FDA for CLL in late 2019.

The third quarter results followed a similar theme as in the second quarter, where a COVID-19 recovery appears to be continuing across most therapeutic areas despite the outbreak of the Delta variant in many regions of the world, including the US.

Bernstein analyst Ronny Gal said the results could bode poorly for other companies in oncology.

"The J&J data suggests the script trends reflect reality for the US," he said. " This should weigh on the other oncology companies. The bright point is that international numbers may be stronger."



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