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Johnson & Johnson CFO: Pharma industry ‘did a fantastic job in helping curtail’ pandemic effects

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Johnson & Johnson CFO Joe Wolk sits down with Yahoo Finance's Anjalee Khemlani to discuss company earnings and COVID-19 vaccine demand.

Video Transcript

- Johnson & Johnson reported earnings today, shares essentially unchanged from where they ended the day yesterday. But they did beat Wall Street estimates. However, they did also cut their guidance. For a little bit of a deeper dive into that report, Yahoo Finance's Anjalee Khemlani joins us live. And, Anjalee, I understand you had a conversation with the CFO. What did you hear from Joe Wolk?

ANJALEE KHEMLANI: Lots going on there. So first of all, on the dollar, saying that it's good news for overseas. But moving back to what's going on in the US, we know that, of course, their consumer unit is spinning out. And the tracks are being laid for that specifically to make movement on whether or not they're going to have a new headquarters and, you know, all the details of a new name, which we still do not know.

In addition, we talked a little bit about the COVID vaccine and just sort of how that's shaping up for the company. We know it's faced so many hurdles over the past year, including manufacturing issues with partner Emergent. And that lawsuit is still going on, as well as the setback from the CDC, limiting where it can be used. But we know that it has been a global front runner when it comes to low- and middle-income countries. So all that and more, listen to what he had to say.

JOE WOLK: So right now, let's credit the industry first for having so many solutions out there that's available. It is actually led to, I would say, excess supply across the globe, lower- and middle-income countries equally, as well as developed countries. And so right now, we are, like we would do for any product, right sizing our manufacturing footprint, our R&D programs, to kind of correlate better with the demand that's out there.

And so we are tapering back. But we're still in the business. We're going to meet our regulatory, as well as our commercial commitments, and just rightsizing it for really the business prospects that are out there. You will recall, too, that Johnson & Johnson, even before we had approval, announced that we were offering this drug on a not-for-profit basis. So it was never material to our financial success. However, we take great pride in the assistance that we provided in helping at least manage the pandemic.

ANJALEE KHEMLANI: Sure. And it did also benefit in the pharma unit for, you know, helping to counter some of the competition you were facing. But then also, talk to me about the global demand because I know we've heard stories more intricately from other companies about what they're seeing. And I know Johnson & Johnson was one of the doses that really we saw a dominant distribution of throughout the pandemic. So right now, where do you see the pockets of demand?

JOE WOLK: You know, I would say that demand has kind of slowed down a little bit. Where the biggest opportunity resided was really lower- and middle-income countries. Again, we had the advantage at the outset of better refrigeration requirements. The one shot was also an advantage.

To their credit, other peers have come up with solutions to some of those answers. And so we are just right sizing in terms of the market available. I think it's going to depend on where those surges may happen next, how health authorities around the world are providing guidance. We know that, you know, many parts of the world, there's vaccine hesitancy.

That's something that needs to be addressed and combated as well. So we continue to monitor the situation. And again, living into our contractual commitments, as well as our regulatory requirements.

ANJALEE KHEMLANI: Considering how large the footprint is of the company and the manufacturing relationships that you already have, looking back on it, would there be a different approach to maybe the government partnership side or just anything different about how you would do the production and distribution of the vaccine next time around?

JOE WOLK: You know, I think everybody learned a lot. But, you know, considering the time constraints, it was an industry achievement, quite frankly. We can always look back and say we could have done this or that. But overall, to think that we were able to test and develop and get a vaccine approved under stringent guidelines, I think, is exceptional.

The supply was out there. We currently are dealing with excess supply across the globe. So I don't think there's many questions or things that we should lament. I think the industry, by and large, did a fantastic job in helping curtail the effects of the pandemic.

ANJALEE KHEMLANI: So as you can hear, a lot going on there for J&J.