Shares of Johnson & Johnson (JNJ), a prominent player in the pharmaceutical industry, opened the trading week with a lackluster performance following a recent decision by the U.S. Food and Drug Administration (FDA). The FDA approved the addition of a warning label to JNJ’s cancer treatment, Carvykti, which highlights the potential risk of fatal side effects affecting the stomach or intestines. This decision comes as the New Jersey-based company is set to unveil its third-quarter earnings report tomorrow.
According to reports, the FDA’s action on Friday represents the strictest warning the agency can issue for a medication. Carvykti, which was co-developed by Johnson & Johnson and Legend Biotech (LEGN), is designed for treating multiple myeloma, a type of blood cancer that impacts the bone marrow. The medication received FDA approval in March 2022.
Carvykti is part of a therapeutic approach known as CAR-T therapy, where a patient’s immune cells are extracted, genetically modified to target cancer cells, and reintroduced into their body. Despite the FDA’s warning linked to some patients developing IEC-EC, a serious bacterial infection impacting the intestines, the agency emphasized that the overall advantages of Carvykti outweigh the risks.
Looking ahead, analysts predict that Johnson & Johnson will report approximately $23.76 billion in revenue for the upcoming quarter, with anticipated earnings of around $2.76 per share. This forecast comes at a time when JNJ stocks have remained resilient despite the overall negative trends in the healthcare sector.
Since the beginning of the year, JNJ’s stock has seen a notable increase of about 35%. However, market sentiment remains moderately cautious, reflected in a Moderate Buy consensus rating based on evaluations from 18 Wall Street analysts. The average price target for JNJ shares is set at $194.56, indicating a modest growth potential of around 2% from current levels.
This situation presents both challenges and opportunities for investors as JNJ navigates regulatory scrutiny and prepares to share its financial performance in the coming days. The company’s ability to balance risk and reward within its product offerings will be closely watched by stakeholders.