Johnson & Johnson: Top-Line Cancer Data Looks Increasingly Likely to Threaten AstraZeneca's Tagrisso

Johnson & Johnson reported positive top-line Mariposa data for its cancer drugs Rybrevant plus lazertinib versus AstraZeneca’s Tagrisso in first-line epidermal growth factor receptor-mutated non-small cell lung cancer. With Tagrisso generating annual sales over $5 billion (over 10% of AstraZeneca's sales), the market size is significant. However, we need to see the detailed data—to be released at an upcoming scientific conference—before making any major changes to our sales projections for the drugs and company fair value estimates. Only the progression-free survival, or PFS, endpoint was statistically significantly better; the overall survival, or OS, endpoint only trended better. As a result, we expect the data to incrementally better position Rybrevant plus lazertinib over Tagrisso. However, we don’t see the data having an impact on either firm’s wide moat, given the very strong pipelines and product portfolios at both companies.