Johnson & Johnson Stock Price Surges 7% On a $450 Million Coronavirus Vaccine Contract

Shares of Johnson and Johnson (NYSE:JNJ) jumped more than 7% today, after the company’s arm Janssen announced it signed a $456 million dollar order with the Trump administration on the order titled the “new vaccine asset for 2019 Novel Coronavirus (COVID-19)”.

Fundamental analysis: More than $1 billion committed in research

Ten days ago, Janssen signed another contract with the Health and Human Services Office of the Assistant Secretary for Preparedness and Response (ASPR) worth $150 million dollar or a “new antiviral” for COVID-19.

Together with the U.S. government, Johnson and Johnson will spend north of $1 billion on vaccine research.

The company said it plans to start testing its vaccine on humans in September, when the vaccine will enter a phase 1 human clinical study, while the pharmaceutical giant eyes early 2021 aimed for emergency use.

The overall goal is to produce more than 1 billion doses of the potential vaccine. To meet this goal, J&J will invest further to expand its manufacturing capacities

Earlier this month, the pharma giant announced a partnership with the Beth Israel Deaconess Medical Center in developing potential preventive vaccine candidates for COVID-19.

Technical analysis: Stock price tests the intra-week resistance

Following today’s news, shares of J&J gapped higher to trade more than 7% to the upside. The price action is currently testing key short-term resistance near the $132 handle.

Following a creation of the 4-year low last week, the price action has rebounded strongly, gaining around 20% from the lows. This is not surprising, given the importance and strength of the support zone near the $110 handle.

A break of the $131 handle, which is currently put to a test, would open the door for a move towards $135.

Summary

Shares of Johnson and Johnson have gained more than 7% today after the pharma giant announced it has signed a contract worth more than $450 million with the Trump administration to work on the development of the COVID-19 vaccine.