No need for panic over J&J vaccine pause

2 min read . Updated: 13 Apr 2021, 11:42 PM IST CHARLEY GRANT, The Wall Street Journal

U.S. pause in rollout after blood-clot cases should boost confidence in the safety of Covid-19 vaccines, not erode it

The emergence of possible safety issues with the Johnson & Johnson Covid-19 vaccine is certainly unwelcome news, but it is far too early for either the general public or Wall Street to panic.

U.S. health authorities recommended a pause in the usage of the shot on Tuesday, following reports of severe blood clots in six women who received the shot. About 6.7 million people have received the vaccine so far in the U.S. J&J shares traded lower on Tuesday morning, while other vaccine makers such as Moderna rallied.

While the headline is scary, especially in a pandemic setting, there is no direct evidence that the vaccine is responsible for these rare cases. Moreover, such a pause is standard practice when possible safety issues arise in a new medication or vaccine. Regulators are historically quite sensitive to safety issues in vaccines, because they are meant for the entire public. In a nonpandemic setting, several years of safety data is typically collected before bringing a vaccine to market. No surprise then that regulators chose to err on the side of caution. For members of the public who are hesitant to take a vaccine, Tuesday’s action should boost confidence, not erode it.

It is possible that the regulators will allow J&J shots to resume in short order. But if not, the U.S. government has diversified its vaccine options, a decision that is looking increasingly prescient. As such, there is plenty of supply even if the J&J vaccine is mothballed over the long term. There were roughly 39 million doses of Pfizer’s and Moderna’s vaccines delivered to care providers but yet to be administered as of Tuesday, according to Centers for Disease Control and Prevention data, and more supply is coming online.

There will be new challenges if the J&J vaccine doesn’t rejoin the mix. It requires only one dose, while Pfizer and Moderna each require two. If the J&J shot is no longer an option, the government will need to rethink how to supply rural and other hard-to-reach communities with vaccines.

As for the financial impact, investors are overreacting by selling the stock. J&J has provided the shots on a nonprofit basis. Even if the company were making money off the vaccine, the setback would be immaterial; the company booked $82.6 billion in sales and generated about $20 billion in free cash flow last year.

In contrast, covid-19 vaccines currently account for all of Moderna’s product sales, so the possibility of extra bulk orders from governments in the future would be far more meaningful. This helps explain why Moderna was up more than 6% Tuesday morning, even after a strong run.

Before panicking over Tuesday’s announcement, a deep breath is very much in order.

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