How J&J’s Coronavirus Vaccine Fiasco Could Benefit Novavax And Others

The extended pause for Johnson & Johnson‘s (JNJ) coronavirus vaccine in the U.S. could bolster vaccine stocks Pfizer (PFE), Moderna (MRNA) and Novavax (NVAX), experts say.


On Wednesday, the Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices opted to delay using J&J’s one-shot vaccine in the U.S. for another seven to 10 days. This comes after six women ages 18-48 experienced unusual blood clots following immunization.

More than half of the 7.2 million doses of the J&J vaccine were administered after March 30. Symptoms of the unusual clotting syndrome have occurred six to 13 days post vaccination. So, it’s likely more cases are coming, according to the CDC.

This opens the doors for rival vaccine stocks, says Michael Haydock, senior director at market research firm Informa Pharma Intelligence. Already, Pfizer Chief Executive Albert Bourla has said the company will bolster production to deliver 10% more doses to the U.S. by the end of May. Further, Novavax’s vaccine could gain authorization over the next few months.

“Even if you just look at Moderna and Pfizer, that’s 600 million doses there and they intend to have those delivered by July,” Haydock told Investor’s Business Daily. “The U.S. population is 330 million, so you can account for most of the population just with those vaccines alone.”

Vaccine Stocks To Fill The Gap

Pfizer with development partner BioNTech (BNTX) and Moderna are in an enviable position. The messenger RNA vaccines haven’t been tied to the same safety issues as those facing J&J and vaccine stock AstraZeneca (AZN), and remain more broadly used. Plus, they require two injections, and the companies sell the vaccines on a for-profit basis.

The messenger RNA technology that the Pfizer and Moderna vaccines use employ a water insoluble fat. That delivers genetic instructions for making a single spike protein to the body. The infamous spike protein covers the outside of the Covid virus. In response, the body creates antibodies.

J&J and AstraZeneca have pledged to provide their vaccines on a not-for-profit basis. Both vaccine stocks use so-called adenoviruses to deliver the Covid antigen to the body. This prods the immune system to respond.

And both have been tied to the same unusual blood-clotting syndrome. This could signal the blood-clotting syndrome is an effect of the adenovirus-based class of vaccines. That could have an impact on the Sputnik V vaccine from Russia and a vaccine from China’s CanSino Biologics.

Meanwhile, vaccine stock Novavax has a different approach entirely. So it wouldn’t face the same safety concerns, Haydock said.

Is Vaccine Hesitancy On The Rise?

The key question in all of this is whether the news will spur additional vaccine hesitancy in the U.S. Vaccine stocks have faced their fair share of scrutiny after developing their Covid vaccines at breakneck speed.

If vaccination slows markedly, it could the point at which the U.S. reaches herd immunity by a few months, Haydock said. Herd immunity occurs when enough people reach immune status — either through vaccination or infection — to leave unvaccinated people still protected.

Throwing another wrench into that: It’s unknown how long vaccines offer protection, and the rise in Covid variants could further complicate matters. SVB Leerink analyst Danielle Antalffy expects U.S. regulators to ultimately put restrictions on who can receive the J&J shot.

Meanwhile, Haydock says a slowdown in vaccination was always inevitable. More people are now eligible for vaccines. The question now is whether it will be enough. Experts remain unclear on how many people need vaccinations to reach herd immunity.

Further, “herd immunity is only relevant if the immune responses protect you against future versions of the virus as well,” he said.

Vaccine Stocks Respond To Pause

The pause hasn’t put a significant damper on Johnson & Johnson stock. Shares have actually risen this week since the Food and Drug Administration and CDC recommended the pause on Tuesday. Other vaccine stocks have seen bigger gains, however.

Moderna and BioNTech shares popped out the strongest gains. BioNTech codeveloped the coronavirus vaccine with Pfizer. Vaccine stocks Novavax and AstraZeneca have also edged higher this week.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.


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