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J&J (JNJ) to Buy Rights to Novel Atopic Dermatitis Candidate

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Johnson & Johnson (JNJ - Free Report) announced a definitive agreement with Swiss biotech Numab Therapeutics to acquire global rights to NM26, a phase II-ready bispecific antibody for atopic dermatitis (“AD”). To execute the deal, Numab Therapeutics will spin off its wholly-owned subsidiary called Yellow Jersey Therapeutics, which holds NM26 rights, to its shareholders. J&J will acquire Yellow Jersey Therapeutics from Numab’s shareholders for a purchase price of $1.25 billion in cash.

AD is a common inflammatory disease characterized by inflamed skin and intense itching. J&J believes NM26 has the potential to transform the standard of care for AD. It targets two clinically proven disease-driving pathways in AD, IL-4R alpha subunit and IL-31. IL-4Rα triggers Th2-mediated skin inflammation, while IL-31 impacts skin itch and subsequent scratching that worsens the disease. NM26, by targeting both IL-4R alpha subunit and IL-31, can be developed specifically for AD patients who suffer from inflamed skin associated with intense itching.

So far this year, J&J’s shares have declined 7.9% against the industry’s 15.9% increase.

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J&J believes NM26 can also be developed for other inflammatory skin diseases involving Th2 inflammation and itch. Numab discovered and engineered NM26 by leveraging its proprietary MATCH technology platform. The transaction is expected to close in the second half of 2024.

A popular FDA-approved interleukin inhibitor available in the market is Sanofi (SNY - Free Report) and Regeneron’s (REGN - Free Report) Dupixent.  The drug has become the key top-line driver for Sanofi as well as Regeneron. In the first quarter of 2024, Dupixent generated global product sales of $3.09 billion (€2.84 billion), which were recorded by Sanofi, representing growth of 24.9% at a constant exchange rate. For Regeneron, Dupixent generated collaboration revenues of $910 million from Sanofi in the first quarter, up 14% year over year.

Zacks Rank and Stock to Consider

J&J currently has a Zacks Rank #3 (Hold).

A top-ranked stock in the healthcare sector is Bioventus (BVS - Free Report) , which has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, 2024 estimates for Bioventus have improved from 16 cents per share to 27 cents per share. For 2025, earnings estimates have improved from 40 cents to 43 cents per share in the past 60 days. So far this year, shares of BVS are up 31.5%.

Earnings of Bioventus beat estimates in three of the last four quarters while missing in one, delivering a four-quarter average earnings surprise of 151.67%.


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