Johnson & Johnson (NYSE:JNJ) has gone into Synergy with Geron to develop its blood cancer treatment apparatus called Imetelstat. This has helped Geron shares go up by a huge margin of 40%, which is good news for Geron investors. However, J&J (NYSE:JNJ) may not have much yield out of this merger. According to basic deal conditions, J&J (NYSE:JNJ) is investing an upfront sum of $35 million for now. An additional $900 million will be spent in research and monitoring targets.
The lump sum that J&J (NYSE:JNJ) has agreed to pay upfront is quite a small amount and points to the evidence that the company might not hold high hopes from this drug. However, there is a potential for success, and if one looks at J&J (NYSE:JNJ) history, the company is quite known to merge with smaller businesses and help them to launch drugs in the market that end up doing good business.
J&J (NYSE:JNJ)’s previous partnership with Pharmacyclics helped the later come up with FDA approved Ibrutininb, a drug that is used in treatment of leukemia. J&J (NYSE:JNJ) is working with Genmab as well as Aragon Pharmaceuticals on various other projects.
The Forbes price estimate for J&J (NYSE:JNJ) is at $101, which infer a 5% discount to market price.
Currently, there are over 1.1 million patients suffering from blood cancer in the US. Its most common forms are leukemia, myeloma and Hodgkin’s and non-Hodgkin’s lymphoma. The disease is cancer of white blood cells that initiates in the bone marrow and spreads to other body parts. According to statistics, leukemia is the most deadly form of blood cancer and is likely to be diagnosed it in children and people aged under 20s. Non-Hodgkin’s is considered the sixth most common cancer in the US, currently.
A well-researched and tested drug can help with treatment of these deadly forms of cancer. However, there is no single formula drug that alone can be used for the treatment. Oncologists always prescribe a combination of drugs to overcome the cancerous cells in the body. With so many types of cancer that effect body in different ways, it is impossible to create a universal pill that can help with treatment and recovery.
With cancer becoming a growing problem for health providers and patients alike, a need to manufacture medication that helps with treatment is becoming a market on its own. This market has started to develop in to a niche that is attracting lot of attention and there are several research centers and pharmaceutical companies that are venturing into this business.
With increasing number of patients, there is a growing need to quicken the pace of this research and production procedure.
The lack of effective drug coming into the market will keep this competition even stiffer, with various parties trying to bring in the most effective recipe.
This market was previously niched by drugs needed for the treatment of cardiac issues and Hepatitis treatment. However, cancer is becoming a new investment that might prove fruitful for J&J (NYSE:JNJ).