By Manskar
Johnson & Johnson reported stronger than expected quarterly profits, but the stock fell nonetheless after the drugmaker temporarily halted a crucial late-stage study of its coronavirus vaccine.
The New Jersey-based company’s sales jumped 1.7 percent to more than $21 billion from July through September, driving adjusted earnings per share up 3.8 percent to $2.20. Both numbers beat Wall Street’s estimates for sales of about $20.2 billion and adjusted earnings of roughly $1.98 per share, according to Bloomberg data.
Still, the stock slid as much as 2.6 percent as investors focused instead on the company’s news that it has paused a Phase 3 trial of its COVID-19 vaccine because of an “unexplained illness” in one of the participants.
The pharmaceutical giant didn’t disclose any details of the person’s illness in the late Monday announcement, but said such “adverse events” are not unusual in these kinds of studies. Its shares were off about 1.7 percent at $149.20 as of 10:07 a.m.
“Any vaccine news, both positive or negative, will outweigh an earnings report as the pandemic overshadows all facets of this economy,” said Anthony Denier, CEO of Webull, an online trading platform.
However, he added, “Pausing of vaccine trials is quite common and I expect this initial selloff of the shares to reverse in the short term.”
Johnson & Johnson got a boost last quarter from its pharmaceuticals division, whose sales jumped 5 percent from the year-earlier period to $11.4 billion thanks to strong demand for cancer drugs and treatments for other conditions.
US sales for over-the-counter products such as Tylenol and Listerine helped lift the company’s consumer health sales by 1.3 percent to $3.5 billion, while medical device sales dropped 3.6 percent to $6.1 billion as the coronavirus pandemic forced patients to postpone procedures.
“Our world-class R&D team is working tirelessly to advance the Phase 3 trials of our COVID-19 vaccine and to uphold the highest standards of transparency, safety and efficacy; while other dedicated teams provide ongoing support to hospitals and patients as they return to sites of care, and ensure patients and consumers have the medicines and products they need,” Johnson & Johnson CEO Alex Gorsky said in a statement.
Johnson & Johnson is one of four drugmakers conducting Phase 3 studies of experimental coronavirus vaccines in the US. The others are AstraZeneca, Pfizer and Moderna.
