Johnson & Johnson (JNJ) shares rallied to their highest level this year after reporting a combination of its lung cancer drugs, Rybrevant and Lazcluse, kept people alive for longer when suffering from locally advanced or metastatic non-small cell lung cancer (NSCLC) with epidermal growth factor receptor (EGFR).
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The healthcare company said the drug combo boosted people’s life expectancy by a full year longer than if they were on the Tagrisso treatment from rival AstraZeneca (AZN).
JNJ Pins Hopes on New Standard of Care
In a statement to investors, JNJ said the chemotherapy-free treatment combination delivered a clinically meaningful and statistically significant improvement for patients relative to Tagrisso, which is the current standard of care. AZN shares followed lower in London on Wednesday.
Stephen Liu, Director of Thoracic Oncology and Head of Developmental Therapeutics at Georgetown University’s Lombardi Comprehensive Cancer Center, said, “Seeing this increase in overall survival in a trial with mature data is powerful.”
It follows the U.S. Food and Drug Administration’s (FDA) approval of the Rybrevant and Lazcluse combination in August 2024, the first chemo-free regimen to treat this type of illness.
Doubts Remain for JNJ’s Bottom Line Impact
However, it is unclear whether the frontline treatment will be taken up by doctors and patients.
Although NSCLC accounts for 85% of lung cancer cases in the U.S., and EGFR is responsible for 10-15% of these, the drug combo comes with more side effects and regular infusions, while Tagrisso is a once-daily pill.
Nevertheless, Dr. Liu is hopeful. “I think the announcement that this leads to people living longer will force a harder look,” he told CNBC.
Is JNJ a Good Stock to Buy?
Overall, Wall Street has a Moderate Buy rating on JNJ, based on five Buys, 11 Holds and no Sell ratings. The average JNJ price target of $173.29 implies about 18.5% upside potential from current levels. Shares of JNJ are down more than 5% in the last year.
