Thought of the Day - March 9 2022 - J&J Throws in the Towel

You may never see an announcement but Johnson&Johnson has been quietly departing the COVID vaccine business. As we talked about before, they were late to the table thus had to introduce a single-shot offer ( Thought of the Day - June 7 2021 - Which Vaccine to Choose ); they have since tried jumping on the booster bandwagon with limited success. J&J also had significant production issues, especially here in North America, which led to them missing the boat entirely in Canada. As a result, much of their demand is coming from the less lucrative COVAX consortium and coupled with their at-cost stance this means limited shareholder return.

Another nail in their coffin is reflected in a recent study that showed a 56% protection rate for J&J, as opposed to 90% for natural infection. In short, when you do the risk-benefit analysis between your likelihood of surviving Omicron versus the risk of complications such as blood-clotting with the J&J vaccine and still having a 50/50 chance of getting Omicron anyway - it is a pretty hard case to make.

Thus, with less than stellar market share, limited profit, and, now the US government is starting to force vaccine manufacturers to make their trial data public, the risk of lawsuits (to which J&J are no stranger), they are moving on to greener pastures. My prediction is they will simply drag their feet and if pushed will meet the minimum volume requirements for existing contracts.

The bottom line is in the western world, the two companies that went for profit first (Pfizer and Moderna) have been far more successful than those that tried to be more altruistic (AstraZeneca and J&J). Isn't it amazing to see capitalism in action.

Cheers

Cliff