Johnson & Johnson Cuts Production, Ends Contracts For Not So Successful COVID-19 Shot – Johnson & Johnson (NYSE:JNJ)

Johnson & Johnson Cuts Production, Ends Contracts For Not So Successful COVID-19 Shot - Johnson & Johnson (NYSE:JNJ)

  • Johnson & Johnson JNJ has significantly scaled back its efforts of manufacturing its COVID-19 vaccine after facing a fall in demand.
  • The FDA approved the single-dose shot in February 2021 as it carried fewer cold-chain storage requirements than other shots.
  • J&J’s initial supply was small. At least nine companies agreed to help manufacture J&J’s shot. Wall Street Journal noted.
  • Yet J&J’s vaccine hasn’t been as widely used as the Moderna Inc MRNA or Pfizer Inc PFE and BioNTech SE BNTX shots.
  • Manufacturing issues limited the shot’s availability, and the risk of a severe but rare blood-clotting condition discouraged some people from using it. 
  • Roughly 400 million doses of the original Pfizer-BioNTech shot and nearly 250 million doses of the original Moderna shot have been administered in the U.S., compared with about 19 million J&J doses, according to the Centers for Disease Control and Prevention.
  • The pharma giant has terminated manufacturing agreements with companies that helped produce the shot during the pandemic, such as Catalent Inc CTLT and Sanofi SA SNY
  • Also, a partnership with Merck & Co Inc MRK to help make the shots, forged at the U.S. government’s urging, has fallen short of expectations. The companies are now engaged in arbitration. 
  • Catalent agreed to early termination of contracts with J&J for fill-and-finish of vaccine vials. Catalent said it received payments of $54 million from J&J to resolve the contracts in October. 
  • In June, J&J planned to terminate its Covid-19 vaccine supply with Emergent BioSolutions Inc EBS, and both companies accused each other of breaching the agreement.
  • In the most recent quarter, JNJ generated $489 million in COVID-19 vaccine sales during the quarter, with none from the U.S.
  • In the Q1 earnings release, JNJ suspended its sales forecast for the COVID-19 vaccine due to global supply surplus and demand uncertainty.
  • Price Action: JNJ shares are down 0.43% at $173.26 on the last check Friday.
  • Photo via Wikimedia Commons

Written by biedex markets