Johnson & Johnson Under Pressure As FDA Calls For Pause On COVID Vaccine

Meanwhile, Johnson & Johnson confirmed that it is "aware of an extremely rare disorder involving people with blood clots in combination with low platelets in a small number of individuals who have received our COVID-19 vaccine. […] We have been working closely with medical experts and health authorities, and we strongly support the open communication of this information to healthcare professionals and the public." The company is also "proactively" delaying rollout of its vaccine in Europe.

New York will replace Johnson & Johnson's COVID-19 vaccines with the Pfizer (PFE) vaccine for appointments scheduled for Tuesday, Orion Rummler of Axios reported, citing New York's health commissioner Howard Zucker.

'INCREMENTAL NEGATIVE': Commenting on the news, JPMorgan analyst Chris Schott said he views the recommended pause of Johnson & Johnson's COVID-19 vaccine based on six reported cases of severe blood clots as an "incremental negative" for the company. At the same time, the adverse event rate appears extremely infrequent and potentially manageable, the analyst contended. Schott also sees Tuesday's update as an "incremental positive" for Pfizer's BNT162 vaccine. More broadly, the pause will have a limited earnings impact on J&J given non-for-profit pricing during the pandemic, he added.

MRNA VACCINES: Meanwhile, Morgan Stanley analyst Matthew Harrison told investors that he sees continued news around potential safety issues with viral vector vaccines improving the outlook for mRNA vaccine makers for 2022 given that marginal demand could shift toward mRNA vaccines from Moderna and Pfizer. He does not expect the overall U.S. vaccination effort or timeline to be materially impacted, even if the pause in use of the J&J vaccine is significant.

Following J&J news, Piper Sandler analyst Edward Tenthoff reiterated an Overweight rating on Moderna with a $208 price target on the shares. The analyst believes Moderna's two-shot mRNA-1273 vaccine deliveries will continue to grow to up to 1B doses this year and 1.4B doses in 2022. Tenthoff anticipates updates including potentially TeenCOVE data and more details around the booster and variant strategies at Moderna's virtual vaccine day on Wednesday. Overall, he believes Moderna is "effectively transitioning into a profitable, global commercial company."

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