What’s sure to be a unique earnings season for pharma kicked off Tuesday as execs with Johnson & Johnson provided details about how the COVID-19 pandemic is affecting the global healthcare giant.
The pandemic, which has spread worldwide and caused more than 120,000 deaths, is “one of the most significant events that any of us have ever experienced,” CEO Alex Gorsky said on the company’s first-quarter conference call.
Aside from the company’s financial performance—which is expected to suffer by the billions this year—execs clued analysts in with behind-the-scenes happenings at the pharma and healthcare giant with operations spanning pharmaceuticals, consumer healthcare and medical devices.
J&J’s guidance and expectations
For starters, the COVID-19 pandemic has forced J&J to lower its revenue guidance for the year by more than $4 billion at the high end—and $6.4 billion at the low end. The company now expects to generate between $79.2 billion and $82.2 billion in 2020, down from a prior estimate of $85.8 billion to $86.6 billion.
Included in the update are several assumptions about how the pandemic will play out. For one thing, J&J’s new numbers are counting on an “acute, shorter-term impact rather than a prolonged impact,” CFO Joe Wolk told analysts.
The company is expecting a peak around mid-April in the U.S and several European countries, as predicted by the prominent IHME model.
J&J further weighed expert commentary and believes that if COVID-19 returns in the fall, the world “should be much better prepared to test, identify and isolate” the virus, Wolk said.
Drugs and devices
Within its own pharmaceuticals group, Wolk said J&J expects a “small level of disruption with delayed diagnoses and patient starts.” The company is keeping a close eye on physician-administered drugs; some infusion centers have been repurposed to treat COVID-19 patients, while others now have fewer chairs to comply with social distancing guidelines.
J&J’s over-the-counter drugs “should continue to perform well as consumers look to self-manage conditions like fever and pain,” Wolk said. The company has seen an initial “pantry-loading” benefit as consumers stocked up on drugs at the start of the outbreak, but J&J doesn’t expect that dynamic will continue for the full year.
In medical devices, which has been hit hardest, the drugmaker offered a detailed breakdown on the specifics of individual markets, including market size and COVID-19 trajectory.
J&J’s vaccine update
J&J is among the pharmaceutical giants involved in the race for a COVID-19 vaccine, and on Tuesday’s call, chief scientific officer Paul Stoffels offered a timeline update.
The company plans to enter human testing in early September and generate initial data by the end of the year. If all goes well, J&J could provide doses beginning early next year under an emergency authorization from the FDA. J&J says it’s planning to develop and market the vaccine on a not-for-profit basis.
Various attributes for the company’s vaccine platform “put us in a leadership position,” Stoffels said, adding that so far J&J has seen “good data in animal models.”
As the work progresses, J&J is conducting “several processes in parallel, many at risk, rather than in sequence,” to speed up development and potential distribution, Stoffels said. J&J has partnered with the U.S. government on its vaccine, and the partners have pledged $1 billion in R&D spending, plus a massive scale-up of manufacturing.
Latest in China
In China, where the COVID-19 outbreak first started late last year, J&J has seen a “gradual return of the business” over the last few weeks, Gorsky said.
More than 50% of the company’s employees are back to work. Over the next few months, J&J is confident “we’ll see more of a return to normal continuing,” the CEO told analysts.
On reopening the global economy
While it’s “difficult to predict” the scenario around how economies could start back up, Gorsky said he can envision a scenario where there is a “progressive, or more gradual reentry” of the workforce while experts rely on increased testing—both for new cases and prior exposure—to guide decisions.
Gorsky believes the process should “start with the science and data on disease progression,” he added. Over time, experts could continue to “build confidence” and learn more about possible COVID-19 therapies. There are dozens in development, and it’s possible some might be available in the summer or fall, he said.
Under such a “comprehensive approach,” by the end of 2020 or early 2021 health officials could better manage the disease and eventually put COVID-19 “behind us at the right point in time,” Gorsky said.
J&J’s first-quarter performance
Overall during the quarter, J&J posted $20.7 billion in global sales, a 3.3% increase from the same period last year. Meanwhile, J&J’s net earnings leaped 54% to $5.8 billion. Consumer healthcare bested pharmaceuticals and medical devices, with revenue growth of 9.2%. Pharma sales increased by 8.7%, while medical devices slipped 8.2% during the period.
Within pharmaceuticals, 9 products notched double-digit growth, including Darzalex, Imbruvica, Erleada and Stelara.
By Eric Sagonowsky
Source: Fierce Pharma
Lonza will invest to expand its drug product manufacturing network in Switzerland. The investment will include installation of a new aseptic fill and finish line in Stein and the expansion of Drug Product Services in Basel. The expansion adds new capabilities to support clinical and commercial manufacturing and enhances existing drug product service offering in Basel and Visp.
Partial reprogramming of adult heart cells to a fetal-like state could help repair heart damage following cardiac injury or disease, scientists at the Max Planck Institute for Heart and Lung Research showed in mice.
When Merck’s women’s health spinoff Organon launched in June, it promised to listen to—and amplify—women’s voices on overlooked health concerns. Now, the company is getting specific. Organon hopes to ignite a conversation about an issue that affects 121 million women around the world every year.