J&J ensuring robust COVID-19 vaccine program with results due in early February

Results from Johnson & Johnson's late-stage COVID-19 vaccine trial will be released in the first few days of February, executives said on a fourth-quarter and full-year earnings call Jan. 26, culminating one of the pharmaceutical company's main focus points of 2020.

"From an innovation standpoint, the development of a safe and effective COVID-19 vaccine was certainly a top priority throughout the year," J&J CFO Joseph Wolk said on the call. "Our level of R&D investment reached an all-time high of $12.1 billion, $800 million more than our 2019 R&D investment."

The vaccine, which is based on more traditional technology than the two mRNA shots already authorized in the U.S. from Pfizer Inc.-BioNTech SE and Moderna Inc., has been tested using only one shot per patient. The mRNA shots require two inoculations.

In earlier studies, J&J's vaccine, called JNJ-78436735, was well-tolerated and resulted in an immune response that lasted at least 71 days. J&J said in a previous release that an emergency use authorization will likely be filed in the U.S. in February if the data indicates the vaccine is safe and effective.

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J&J CEO Alex Gorsky said the new vaccine data will be parsed out to demonstrate effectiveness and safety in as many groups of people as possible.

"We want to ensure that we've got a very robust program, not only geographically, but also by ethnicity and gender as well as a number of other different parameters, all as part of an effort to give us the best possible understanding of the efficacy and safety profile of our vaccine," Gorsky said.

Wolk said J&J intends to meet distribution commitments made to the U.S., Europe and developing countries, although he was less clear on whether the goals will be met on time. The healthcare giant has a goal of producing 1 billion doses in 2021.

"The definitive statement here is that we are very comfortable in meeting our commitments to those respective countries or organizations," Wolk said.

As for pricing of the vaccine, Wolk said the cost would depend on negotiations with specific countries when the clinical data is available and that "the volume will impact the selling price." The information will be more concrete at the next quarter's earnings call, Wolk noted.

Gorsky said the company is watching the COVID-19 variants in certain parts of the world like Brazil and South Africa to determine whether the vaccine will adequately protect the public from the new forms that have cropped up.

"Our scientists are already anticipating, as you've heard from some of the other companies, about what our potential scenarios are to ensure that we're prepared," Gorsky said. "But it starts with taking a look at the data that we should have shortly — once we have that, we will be able to give a much more comprehensive review on exactly how we think our vaccine will work against current strains and variants."

J&J's expected data will arrive after fellow drugmaker Merck & Co. Inc. opted to shut down its COVID-19 vaccine programs due to a lack of efficacy in early trials. Like J&J, Merck also used the more traditional method of vaccine development.

Medical devices still drag financial results

J&J beat analyst expectations with fourth-quarter sales of $22.5 billion and full-year sales of $82.6 billion. Pharmaceutical sales drove much of the revenue boost with 8.4% growth over the year, although the medical devices unit continued to dampen financial results due to reduced sales as a result of the COVID-19 pandemic.

Cantor Fitzgerald analyst Louise Chen said in a Jan. 26 note that the decline in medical device sales was primarily driven by the continued deferral of medical procedures in surgery, orthopedics and vision. J&J's overall diversified business model allowed for a positive outlook in 2021 with guidance that translates into adjusted operational earnings growth of more than 16%, Chen added.

Gorsky is confident the medical device sector is beginning to bounce back.

Growth in the pharmaceutical division was driven primarily by sales of immunology drug Stelara and cancer treatments Darzalex and Imbruvica, Cowen analyst Joshua Jennings said in a Jan. 26 note. Investor sentiment was likely to improve with the better-than-expected results, Jennings said.

J&J's stock was up 3% to $170.96 per share as of 10:54 a.m. ET.