Johnson & Johnson JNJ announced that its subsidiary, Janssen, has entered into an expanded agreement with the Biomedical Advanced Research and Development Authority (“BARDA”), part of the U.S. Department of Health and Human Services (“HHS”). The company entered into the agreement to accelerate its investigational vaccine program for the new coronavirus named 2019-nCoV, recently found in China.
J&J had announced plans last month to develop a 2019-nCoV vaccine with multi-pronged approach. The company has already initiated the process to identify compounds with antiviral activity against 2019-nCoV. This collaborative partnership with BARDA will help the company to share research and development cost related to 2019-nCoV vaccine. The funding from BARDA is likely to expedite the progress of a promising pre-clinical candidate into phase I clinical study. BARDA may provide additional funding to support its future clinical development progress. Meanwhile, J&J will focus on expanding manufacturing and production capacities for any potential 2019-nCoV vaccine candidate, to meet the currently increasing demand.
The company will leverage Janssen's AdVac and PER.C6 technologies for development of a coronavirus vaccine. These technologies have previously supported the development of Ebola, Zika, RSV and HIV vaccine candidates by J&J. The company is also working with its global partners to search its library of antiviral molecules for rapid discovery of a potential candidate.
Shares of J&J have gained 13.3% in the past year compared with the industry’s increase of 13.2%.
The World Health Organization (“WHO”) has declared the coronavirus outbreak a global public health emergency, as the viral infection has spread to more than 20 countries. The disease caused by the coronavirus found last month in Wuhan, China has been officially named Covid-19 by WHO.
Per a recent Bloomberg article, more than 40,000 people across the world have been diagnosed with Covid-19, majorly in China. The death toll has reached 1,113 in China. Several countries are taking precautionary measures to contain the risk of an outbreak. Primarily, Gilead’s GILD antiviral candidate, remdesivir, is being administered to infected patients. We note that remdesivir is not approved for any indication, globally.
Apart from J&J, several other pharma/biotech companies are engaged in developing a vaccine for the deadly 2019-nCoV. Earlier this month, Regeneron Pharmaceuticals REGN also entered into an expanded agreement with HHS to develop a 2019-nCoV vaccine. Moreover, Moderna MRNA and Inovio Pharmaceuticals have received grant from CEPI, a public-private nonprofit organization, to develop a similar vaccine.
Please note that the same Bloomberg article stated that although new cases of Covid-19 were found outside China, latest data shows some signs of easing of the outbreak in China. Although these signs look encouraging for public health, containment of the outbreak before successful development of vaccines may negatively impact pharma companies that are investing in developing a 2019-nCoV vaccine. Moreover, another Bloomberg article stated that investors are developing short interest in some of these small biotechs following the initial hype.
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J&J currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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