Johnson & Johnson Signs Single-Shot COVID-19 Vaccine Deal With AVAT

Janssen Pharmaceutica NV, a Johnson & Johnson company has inked a deal with the African Vaccine Acquisition Trust (AVAT) to supply up to 220 million doses of its single-shot COVID-19 vaccine candidate to the African Union’s 55 member states. Per the terms of the deal, deliveries of the COVID-19 vaccine would begin in the third quarter of 2021.

AVAT might order an additional 180 million doses, for a total of up to 400 million doses through 2022. The availability of the vaccine candidate awaits authorization by the national regulatory authorities of AU member states.

Johnson & Johnson (JNJ) CEO Alex Gorsky said, “From the beginning of this pandemic, Johnson & Johnson has recognized that no one is safe until everyone is safe, and we have been committed to equitable, global access to new COVID-19 vaccines. Our support for the COVAX Facility, combined with supplementary agreements with countries and regions, will help accelerate global progress toward ending the COVID-19 pandemic.”

Last December, Johnson & Johnson and Gavi, the Vaccine Alliance, agreed in principle, in support of the COVAX Facility. The initial vaccination needs of 190 participating economies, including many countries in Africa have been supported by this agreement. Both are likely to enter into an advance purchase agreement (APA) that would supply 500 million doses of the Johnson & Johnson’s vaccine to COVAX through 2022. (See Johnson & Johnson stock analysis on TipRanks)

Furthermore, the rising severity of COVID-19 in Africa along with the emergence and continued spread of a SARS-CoV-2 variant in the Republic of South Africa, which shows increased transmissibility has been recognized by Johnson & Johnson.

The data released from the Phase 3 ENSEMBLE study reflected that Johnson & Johnson’s single-shot COVID-19 vaccine has a favorable tolerability profile. Additionally, the study confirmed that the reduction in symptomatic COVID-19 disease in individuals who received the vaccine in comparison to individuals given the placebo was 67%.

Additionally, the data confirmed 85% efficacy of the vaccine in preventing severe disease across all regions studied and demonstrated that the vaccine protects against hospitalization and death due to the COVID-19 disease across countries with different variants, commencing 28 days after vaccination. Notably, variants observed in an ongoing analysis in the ENSEMBLE study included the B.1.351 variant which was identified in 95% of the COVID-19 cases in South Africa, the company said.

On March 18, Credit Suisse analyst Matt Miksic reiterated a Buy rating and a price target of $193 (17% upside potential) on the stock, following the updated intra-quarter analysis of 1Q script data trends, which suggests Johnson & Johnson’s largest U.S. Pharma franchises are rising at strong levels (up 13-14%), but below the 1Q estimate of 17%.

Miksic stated “Compared to our previous analysis, trends in Stelara, Tremfya and Xarelto (up 22%, 13% and down 2%) have fallen further behind our estimates (up 27%, 31% and 6%), while Imbruvica (up 4%), is closing the gap to our Q1 projection (up 12%). Prezista/Symtuza and Uptravi continue to trail our estimates, partially offset by continued strength in Darzalex, Erleada and Opsumit.”

The consensus rating among analysts is a Strong Buy based on 9 Buys versus 1 Hold. The average analyst price target stands at $191.22 and implies upside potential of 16% to current levels over the next 12 months. Shares have gained 24% over the past year.

Furthermore, Johnson & Johnson scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.