(JNJ) Archives - Page 14 of 29 - Mad Hedge Fund Trader

Waiting for This Biotech to Stop Monkeying Around

Almost immediately after US President Joe Biden advised that “everybody” should be concerned over the new worldwide outbreak of the monkeypox virus, the shares of biotechnology and healthcare companies working on monkeypox treatments and vaccines started to rise.

Shares of Danish company Bavarian Nordic (BVNKF), the only monkeypox vaccine developer approved in the US, were up 5.8% in premarket following the announcement.

Bavarian Nordic’s vaccine, called Jynneos, uses a live version of the smallpox virus, which has been altered so that it no longer can replicate in the recipient’s body or cause any infection.

Instead, it has been engineered to activate the immune system and prepare the body’s defenses to fight off smallpox and monkeypox viruses.

Based on data from Africa, two shots of Jynneos, administered 28 days apart, recorded up to 85% in terms of efficacy against monkeypox.

In 2019, Jynneos received regulatory approval from the US FDA for both smallpox and monkeypox.

Aside from Bavarian Nordic, shares of Emergent BioSolutions (EBS) also rose by 11.8% following Biden’s announcement.

While Emergent has no vaccine specifically for monkeypox, it has a smallpox vaccine that can be used to prevent monkeypox.

It can be recalled that Emergent BioSolutions has been an exiled ticker after the US Congress launched an investigation on the manufacturing issues in its Bayview Facility in 2021.

Although the company has managed to clean up that mess and is back to working with Johnson & Johnson (JNJ) to produce COVID-19 vaccines, EBS has yet to return to investors’ good graces.

While the scale of the threat has yet to be determined, the US has secured contracts for Jynneos and Emergent BioSolutions’ vaccine and is already stockpiling in case of an outbreak.

What’s curious, though, is that another company has benefited from this announcement despite not having any monkeypox or even smallpox vaccine candidates.

Inovio Pharmaceuticals (INO) shares rose by 12.2% following the announcement—a surge that couldn’t be adequately explained since the company has no relevant product and does not seem to have any program even remotely linked to this potential outbreak.

As far as I can tell, the last time Inovio even mentioned monkeypox was in 2010 when it discussed a potential experiment on a vaccine that could protect nonhuman primates against the virus. However, nothing came out of that plan either.

If Inovio sounds familiar to you, it’s probably because it was one of the frontrunners in the early days of the COVID-19 vaccine race.

However, it eventually lagged behind the likes of Moderna (MRNA), Pfizer (PFE), BioNTech (BNTX), and AstraZeneca (AZN).

One primary reason for this is the FDA’s decision to suspend Inovio’s Phase 3 trial in late 2020, with the study only resuming sometime in 2021.

As if that’s not enough, Inovio also faced some internal battles following the resignation of its CEO.

Now, the company has shifted gears and plans to offer its COVID-19 candidate as a booster shot instead of a primary vaccine.

The change of plans regarding the COVID-19 vaccine might be disappointing for some, but it’s essential to be realistic about expectations.

At the moment, the vaccine landscape has been dominated by Pfizer and Moderna, with AstraZeneca and Johnson & Johnson gaining ground as well.

Just recently, another challenger joined the fray: Novavax (NVAX).

Needless to say, the COVID-19 vaccine market is becoming crowded, and the competition is getting more intense.

Considering that Inovio has yet to catch up with the development of its candidate, it would be unwise to challenge the already established developers dominating the market today.

Hence, offering its COVID-19 candidate as a booster would provide it with higher marketability since health experts encourage people to mix and match their vaccines.

Outside these efforts, Inovio is a leader in developing DNA plasma-based vaccines. Before the pandemic, the company had been working on an extensive pipeline using this technology.

One of the most promising DNA-based vaccines from Inovio is VGX-3100, which targets an HPV-triggered disease called cervical dysplasia. Simply, this is a pre-cancer condition.

Inovio’s candidate is the first-ever DNA-based treatment that reached Phase 3 trials and reaped positive results.

This is an exciting development, especially in light of Inovio’s partnership with Qiagen (QGEN), as the two can leverage their work to determine which patients are at risk.

Basically, Inovio and Qiagen might just be on the verge of coming out with a preventive vaccine for cancer.

If things go according to plan, the data should be released by the second half of 2022. In terms of price, VGX-3100 is expected to cost roughly $10,000.

Aside from these, Inovio is also collaborating with Regeneron (REGN) to develop a cure for glioblastoma, an incredibly aggressive type of brain cancer. So far, Phase 2 trial results look promising, and the partners are on their way to progressing to Phase 3.

Inovio’s pipeline covers many DNA vaccines targeting infectious diseases and cancers. Most are still in the early phases of development.

While the programs in Phase 2 and 3 trials are promising, I think it’s still too early to predict whether Inovio is truly capable of delivering on its promises.

I know that Inovio shares look like such a bargain these days, especially if the company ends up receiving regulatory approvals in the coming months, but I’m not yet fully convinced.

Overall, Inovio is worth considering right now. It’s definitely on my list.

But before I commit, I’d like to see at least whether the company’s COVID-19 and HPV pipelines can move past the latest headwinds and advance to the next levels.

May 10, 2022

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
May 19, 2022
Fiat Lux

Featured Trade:

(A RELIABLE STOCK THAT CAN WITHSTAND ANY GLOBAL SHOCKWAVE)
(JNJ), (PFE), (VTRS), (MRK), (OGN), (ABBV), (ABT), (NVO)

A Reliable Stock That Can Withstand Any Global Shockwave

Biotech Letter

Investing is a long-term bet that requires patience and a strong risk appetite to enjoy eventual big wins.

In a world filled with uncertainties and gambles in the ever-evolving stock market trends, risk-averse investors are on the lookout for secure and stable options.

After all, who wouldn’t want to invest their hard-earned cash in a stock that can survive even the most intense macroeconomic shocks?

The name that easily fits these criteria in the biotechnology and healthcare sector is Johnson & Johnson (JNJ).

Reviewing JNJ’s five-year price movements from 2017 until 2022, a steady bullish trend of roughly 46% growth can be seen.

This trend has continued amid the slowdowns, with the stock delivering consistent growth and recovery despite serious dips.

In early 2020, when the COVID-19 outbreak wreaked havoc on the global economy, JNJ tanked along with other stocks. However, the company steadily showed signs of recovery mere weeks following the outbreak.

By 2021, JNJ managed to record a substantial increase of 11.4%. More importantly, it was able to sustain that trend throughout the year.

In March 2022, when the Ukraine-Russia crisis disrupted the economy, several businesses in the industry once again crashed due to supply chain and logistical issues. Amid these disruptions, JNJ still managed to stay on its growth path and develop contingencies to protect its assets.

Widely known as a global healthcare titan, JNJ holds a market capitalization that is hovering close to roughly half a trillion dollars.

As the parent company of the top-rated brands like Benadryl, Listerine, and Neutrogena, JNJ’s market operations are trifurcated into three main segments: MedTech, Pharmaceutical, and Consumer Health.

In November 2021, the company disclosed its plans to spin off its consumer arm into a separate publicly-traded company.

Similar to the move of Pfizer (PFE) with its Viatris (VTRS) spinoff and Merck (MRK) with Organon (OGN), JNJ’s goal is to reclassify a number of its international OTC drugs from its Consumer Health branch to form part of the pipeline of the new spinoff company.

Needless to say, the company’s notably diversified portfolio provides its with a competitive advantage in this highly volatile market.

Meanwhile, its other two segments are also contributing to JNJ’s growth. Its Pharmaceutical branch recorded a 6.3% increase in revenue in the first quarter of 2022, while its MedTech segment grew by 5.9%.

In total, JNJ’s sales for the first quarter of 2022 rose by 5% to reach $23.4 billion. This also boosted the company’s earnings per share to $2.67.

Riding the momentum of its strong first-quarter showing this year, JNJ once again demonstrated why it is hailed as a Dividend King.

The company hiked its quarterly dividend by 6.6% to $1.13 per share, making this the 60th consecutive annual dividend increase.

Considering that the company has been paying out dividends since 1963, this latest increase is indicative of how safe JNJ is for investors who want to multiply their cash while earning a regular income via dividends.

Moreover, JNJ is a clear frontrunner in the healthcare world and continues to work on innovative solutions to keep it ahead of its competitors.

Taking a closer look at the broader competitive field of healthcare industry players that are considered similarly sized, like AbbVie (ABBV), Abbott Laboratories (ABT), and Novo Nordisk (NVO), JNJ has the most significant market capitalization.

In this aspect, the company is the largest among its direct rivals. Therefore, it essentially reinforces its capacity to raise finances.

Given its perpetual bullish climb since its trade initiation back in 1982 and its addition to the Dow Jones Industrial Average (DJI), JNJ stock has been long known to hold strong credibility.

Actually, JNJ and Microsoft (MSFT) are the only two American companies with an AAA credit rating, a grade above the United States government itself.

This means that JNJ has such a strong sense of certainty in debt repayment that it holds a lower probability of default than the US government—an entity allowed by law to print money.

Overall, JNJ has proven to be an excellent option for risk-averse investors searching for growth and profitability.

It has strong financial fundamentals and a commanding market position, making it a highly stable and secure investment.

Moreover, its diverse portfolio minimizes the risk exposure of the company. All these make JNJ a great buy. Hence, it would be a wise move to buy the dip.

jnj

May 6, 2022

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
May 6, 2022
Fiat Lux

Featured Trade:

(A PANDEMIC CONQUEROR READY FOR MORE)
(PFE), (BNTX), (AMGN), (JNJ), (BIIB), (RHHBY), (SGMO), (BMRN)

A Pandemic Conqueror Ready for More

Biotech Letter

The past 50 years have been excellent for investors as stocks have climbed by over 100% within a five-year span ending last December 2021.

Sadly, this story has taken a different course in 2022 as investors became more cautious primarily due to inflationary fears.

However, a handful of businesses are strong and promising enough to survive and even thrive in a high inflation environment.

One company that met this challenge head-on in the healthcare and biotechnology sector is Pfizer (PFE).

In fact, Pfizer didn’t simply meet the estimates of Wall Street in its 2022 first-quarter earnings report. It blew past their expectations.

Pfizer recorded $25.7 billion in revenue for the first quarter, well above the consensus estimate of $23.9 billion. This represented a 77% surge year-over-year.

Meanwhile, its earnings per share of $1.62 was notably higher than the average $1.47.

As anticipated, these gains were mainly driven by the staggering revenues from its COVID-19 vaccine and antiviral medication.

Comirnaty continued its winning ways, with Pfizer generating a jaw-dropping $13.2 billion in sales from the vaccine it co-created with BioNTech (BNTX).

The company's market share in the developed world currently stands at 67%, while it holds 62% of the global market.

As for its Paxlovid antiviral treatment, this drug raked in $1.5 billion in the first quarter and claimed approximately 90% of the US market.

Evidently, Pfizer continues to receive massive boosts from its COVID-19 treatments.

Now, the real question moving forward hinges on whether these financial results can be normalized as part of Pfizer’s future regardless of the pandemic’s effects.

After all, the vaccine sales comprised almost 60% of the company’s total revenue. With this in mind, Pfizer remains firm in its projections that it could rake in $98 billion to $102 billion in annual revenue for 2022.

While this still indicates a strong belief in the pandemic-related treatments, it’s also indicative of a deeper and more diverse pipeline.

Although not as high-flying as the COVID-19 vaccines, a number of other categories notched notable gains year-over-year, like its rare disease segment, which saw a 23% increase.

The growth of its oncology sector, which recorded a 6% climb, was mainly attributed to the 35% rise and expansion of Pfizer’s biosimilar arm.

So far, the top-selling treatments in this segment are Retactrit, a biosimilar of Amgen’s (AMGN) Epogen and Johnson & Johnson’s (JNJ) Procrit, Zirabev, a biosimilar of Roche’s (RHHBY) Avastin, and Rixience, a biosimilar of Biogen’s (BIIB) Rituxan.

Even Pfizer’s pneumonia vaccines showed off a 22% growth this quarter with $1.57 billion in sales.

Apart from these, the FDA has recently lifted the hold on the Hemophilia A gene therapy clinical trials of Pfizer and Sangamo (SGMO).

Without this limitation, the two companies may already have the opportunity to catch up to the leading biotech in this sector, BioMarin (BMRN). If everything works out, Pfizer and Sangamo are slated to release a readout from this program by the second half of 2023.

Another venture that’s expected to pay off soon is Pfizer’s $6.7 billion acquisition of Arena Pharmaceuticals, which was seen as a decisive move to bolster its inflammation and immunology segment.

The company is expected to file for a regulatory for Etrasimod, Arena’s lead program on ulcerative colitis and Crohn’s disease, by the second half of 2022.

This means that the recent acquisition is already expected to add to the near-term growth of Pfizer, which could be as early as 2023.

Moreover, Etrasimod represents an incredible market opportunity, with the treatment projected to reach $28 billion in annual sales by 2025.

Aside from the promising potential of Arena’s pipeline, Pfizer’s move also shows how the company is leveraging the capital influx from its COVID sales and its strategy on a more aggressive growth investment cycle.

On top of that, Pfizer’s partnership with BioNTech highlighted the benefits and competitive advantage in terms of how the biopharmaceutical titan works and collaborates with smaller biotechnology firms.

Hence, Pfizer has made itself the first and obvious choice among budding companies with groundbreaking innovations.

Overall, Pfizer has proven itself more than capable of handling any economic and health crisis. Not only has it come up with a solution that ultimately saved humanity from a deadly virus, but it also emerged victorious and stronger amid a global meltdown.

Given its history and trajectory, it looks like it has nowhere else to go but up. Hence, it would be best if you bought the dip.

March 29, 2022

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
March 29, 2022
Fiat Lux

Featured Trade:

(A DURABLE AND ENDURING STOCK IN THESE TROUBLING TIMES)
(AMGN), (JNJ), (AZN), (ABBV)

A Durable and Enduring Stock in These Troubled Times

Biotech Letter

The latest market sell-off has motivated me to take a closer look at blue-chip businesses with solid track records of bringing value to shareholders regardless of the economic conditions.

After all, an insistence on putting money only in the highest quality stocks is key to long-term success in investing.

And when investing in the biotechnology and healthcare industry, it’s vital to choose stocks with robust drug portfolios and promising pipelines of candidates. This ensures continuous solid growth in the near and long run.

Amgen (AMGN) fits that description.

Over the years, Amgen has risen as one of, if not the most prominent biotechnology company. This company is one of the largest and possibly longest-running biotechnology businesses in the world.

It is a leader in various sectors, including oncology, blood disorders, cardiology, inflammation, and immunology. It has also expanded in other segments, with “King of Biologics” as the latest moniker for this biotech titan.

Amgen has been consistently profitable throughout its history, sustaining industry-leading margins that boost both its top and bottom-line growth.

Founded in 1980, it has steadily made a name for itself following the approval of its first drug —anemia treatment Epogen — in 1989.

Since then, this biotechnology stalwart has evolved into a significant player in the industry with a market capitalization of roughly $130 billion and an enterprise value of approximately $156 billion.

This translates to the company demonstrating a solid balance sheet on top of a robust repurchase program and an impressive track record of increasing its dividends.

Amid the sluggish economic climate in 2021, Amgen pulled $26 billion in total revenue to record a 6% climb year-over-year in adjusted EPS.

This improvement in its performance was fueled by its remarkable portfolio of branded drugs and biosimilars.

Naturally, the next question is whether the company can sustain this growth.

For 2022, Amgen announced a guided total revenue within the range of $25.4 billion and $26.5 billion.

In 2023, the company anticipates an accelerating growth primarily due to the US launch of the all-around immunology injection Amgevita, the expansion of psoriasis and psoriatic arthritis Otezla’s label, and additional momentum from future blockbusters severe asthma treatment Tezspire and non-small cell lung cancer oral therapy Lumakras.

Looking at the track record, the company estimates potential mid-single-digit growth in revenues from these products and over double-digit increase in EPS.

Moreover, the company has an impressive pipeline of roughly 40 innovative candidates. The programs include 10 cutting-edge molecules advancing through mid- and late-stage trials.

Among these are biosimilars for blockbuster products such as Johnson & Johnson’s (JNJ) Crohn’s disease treatment Stelara, and AstraZeneca’s (AZN) blood disorder drug Soliris.

If these get the green light, then each biosimilar could siphon hundreds of millions of dollars in yearly revenue from these competitors.

In particular, Amgen’s work on a biosimilar for AbbVie’s (ABBV) severe rheumatoid arthritis treatment Humira could generate substantial sales for the company.

Its burgeoning biosimilars programs and other pipeline candidates contribute to predictions that Amgen could record at least 7% in annual earnings growth over the next five years.

More importantly, Amgen offers a market-beating 3.3% dividend yield, making it an attractive investment with incredible growth potential.

As the market continues to make sense of the effects of inflation, the continuing conflict between Ukraine and Russia, and the constant threat of rate hikes, it has become essential to come up with a list of top quality companies that can offer steady growth and a healthy dividend.

Thus far, Amgen has been excellent at delivering on both counts.

It’s a great biotechnology company with a very solid history and, judging from its pipeline candidates, an even more solid future.

March 24, 2022

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
March 24, 2022
Fiat Lux

Featured Trade:

(A BIOTECH STOCK POISED FOR A REBOUND)
(MRNA), (PFE), (BNTX), (AZN), (JNJ), (NVAX), (GSK), (SNY)

A Biotech Stock Poised for a Rebound

Biotech Letter

Healthcare stocks have experienced an unusual run over the past few years. The sector was nearing scorching hot levels when the pandemic started, only to go ice cold by the end of 2021.

Nonetheless, seasoned investors in the sector know that solid companies will continue to grow at a steady pace despite the decline in their stock prices.

This is where the fun starts for some investors.

After all, we all enjoy a good bargain, especially when it comes to promising stocks. What makes it even more enticing is if the stock has a proven track record and solid prospects in its pipeline.

Based on these criteria, one name that readily comes to mind is Moderna (MRNA).

Since it reached its peak in August 2021, Moderna shares have fallen by over 60%. Despite these losses, the business is still regarded as one of the most promising companies in the sector. This means that the stock can recover soon.

Moderna is a significant mover in one of the hottest markets today: the COVID-19 vaccine sector. Since the pandemic started, the company has been able to generate billions of dollars in profit from its only commercialized product: mRNA-1273.

While the demand has been divided now due to the entry of other vaccine developers, Moderna still expects to earn at least $19 billion from its COVID-19 vaccine.

Before becoming a household name, not many people knew of Moderna’s existence. At that time, most weren’t even confident that the messenger-RNA vaccines would actually work.

In the early stages, Moderna was only rivaled by Pfizer (PFE) and BioNTech (BNTX) in this particular field. Meanwhile, the rest of the world was betting on other companies like AstraZeneca (AZN), Johnson & Johnson (JNJ), and even Novavax (NVAX).

As soon as the results came out, Moderna shares skyrocketed to unprecedented heights. In 2020, the company recorded a 434% growth.

However, recent times have not been as kind to Moderna. Investors now worry that this might be the reality, a.k.a. the post-pandemic sales.

This is far from the truth.

Admittedly, sales from the vaccine would dwindle over time due to competition and possibly even herd immunity.

In preparation for this eventuality, Moderna has been stocking up its pipeline. Recently, the company announced pivotal Phase 3 trials for two of its vaccine candidates.

One is for cytomegalovirus (CMV) and the other is for the respiratory syncytial virus (RSV).

Both candidates hold the potential to become blockbusters.

The RSV market is projected to become larger than initially anticipated, reaching roughly $10 billion. Given the promise of this sector, it comes as no surprise that Moderna has competitors. Sanofi (SNY), GlaxoSmithKline (GSK), and Pfizer are some of the biggest players here.

As for the CMV vaccine, the product has the potential to reach $2 to $5 billion in annual sales. Moreover, this program can be linked to other sectors like oncology and autoimmune diseases.

Other than these, Moderna has been developing its HIV vaccine. It already started with trials, with its first participant queued to receive the first dose of the experimental candidate.

This could be another massive revenue stream for Moderna as the annual spending on HIV is estimated to reach $500 billion globally.

Another candidate is Moderna’s flu vaccination program. However, this might be a more difficult path as the company faces strong challengers, including Pfizer, Novavax, and GSK.

In addition to these, the company is also working on Nipah and Zika vaccines. There are also plans for herpes simplex virus (HSV) and varicella zoster virus to join the roster soon.

Cornering the vaccine market is a good approach since Moderna has a tested and proven product dominating the industry today.

That is, no one is doubting the power and efficacy of mRNA-based strategy in vaccines.

More importantly, there is no question that Moderna is performing well in this field. This is an unshakeable and established strength that Moderna investors should be focusing on.

A seemingly unstoppable stock in the past few years, this company suddenly fell out of favor. Nevertheless, its prospects remain the same and it can still deliver significant revenue—something that’s expected to go on well into the future.

March 1, 2022

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
March 1, 2022
Fiat Lux

Featured Trade:

(THE FUTURE OF SURGERY)
(ISRG), (MDT), (SYK), (ZBH), (JNJ)

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