Where Will Johnson & Johnson Go Next?

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With shares of Johnson & Johnson (NYSE:JNJ) trading around $92, is JNJ an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Johnson & Johnson engages in the research and development, manufacturing, and sale of various products in the healthcare field worldwide. The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics. The company offers a range of products used in general care, women’s health fields, nutritional and anti-infective, contraceptive, gastrointestinal, oncology, pain management, and vaccines. It also offers products to treat cardiovascular disease, orthopedic and neurological products, blood glucose monitoring and insulin delivery products, and general surgery products. Through its wide variety of healthcare products, Johnson & Johnson is able to support consumers and medical businesses around the world that continue to demand improved products.

The FDA today turned turned down — for the third time — the supplemental New Drug Application (or, sNDA) for rivaroxaban (Xarelto, Johnson & Johnson) for use in acute coronary syndrome patients to reduce MI, stroke or death. In addition, the FDA —  for the second time — turned down the sNDA for rivaroxaban in the same population for the reduction of stent thrombosis.

The complete response letters come as little surprise, since an FDA advisory panel last month strongly recommended against approval for the indications. Although Johnson & Johnson has made considerable efforts to fill in the missing data, the FDA reviewers and panel members did not believe the data was reliable enough to reach firm conclusions about the relative safety and efficacy of rivaroxaban for use in ACS. “We remain committed to providing patients who have suffered from acute coronary syndrome with additional protection against stent thrombosis and secondary life-threatening cardiovascular events,” said a Johnson & Johnson executive in a statement. “We are evaluating the contents of the letters and will determine the appropriate next steps.”

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