|Day's range||5.40 - 6.95|
Market participants are bracing for the start of what will likely be the weakest corporate earnings season since the global financial crisis, as the coronavirus pandemic and measures to contain it hit business activity especially hard in the second quarter.
(Bloomberg) -- A rare item has hit the auction block: an investment guaranteed to pay as long as people fret over bad breath.Bids are being taken through Tuesday on a share of royalties backed by Listerine mouthwash sales. They stem from contracts signed 140 years ago by its inventor and still cited in business law classes that require the maker -- currently Johnson & Johnson -- to pay shareholders in perpetuity.“It’s a crazy contract,” said Gary Young, co-founder of Royalty Exchange, which is conducting the auction of a single share. “It’s a contract that says this royalty must be paid as long as Listerine is sold.”More than 110 bids have already been placed and the price has topped $340,000.While the share up for sale only paid $32,000 last year, it’s a payment that will keep coming as long as -- to quote the brand’s slogan -- Listerine “kills germs that cause bad breath.” And Listerine is by far the most popular mouthwash -- it had a 37% share of a growing $5.2 billion global market for mouthwashes and dentals rinses last year, according to market research firm Euromonitor International.The mouthwash has been used by more than one billion people in more than 85 countries across the globe, Melissa Munoz, a J&J spokeswoman, said.The formula for Listerine was invented by Joseph Lawrence, a St. Louis doctor who originally marketed it as a cure for dandruff and a treatment for gonorrhea. He was inspired to develop an antiseptic after hearing a talk by famed British doctor, Joseph Lister, who discovered that disinfectants could reduce post-surgical infections.There are conflicting reports as to whether Dr. Lister approved of the use of his name on the antiseptic liquid, medical historian Leonard Vernon, a New Jersey chiropractor, said. J&J, on its website, says that speech by Lister in New York also inspired Robert Wood Johnson and his brothers in 1886 to found the company that bears their name.Lawrence wasn’t having much luck selling Listerine on his own, so he sold the formula to a pharmacist named Jordan Wheat Lambert in return for royalty payments based on sales. The original deal was for $20 per gross -- 144 bottles -- though that later was lowered to $6 per gross, and is now $6 based on sales of certain ounces of Listerine, since bottle sizes vary, Young said.One thing that didn’t change in the contracts was that the royalties would be paid to Lawrence and his “heirs, executors and assigns” with no time limit listed.Lambert’s company built the brand into what it is today by marketing it to treat “halitosis,” a word that wasn’t familiar to American audiences but which ads warned could drive away friends and cause a young woman to become “often a bridesmaid but never a bride.”When Lambert’s company merged with Warner-Hudnut Inc. in 1955 to become Warner-Lambert, the new company sued to avoid paying the royalties, which by then totaled $1.5 million a year. It argued that the contract was based on access to a trade secret for the Listerine formula that was no longer a secret. In a 1959 ruling still taught to law school students, a judge disagreed, saying the obligation to continue paying “is plain from the language of the agreements and is implicit in their terms.”“It’s one of these cases that stands out because it’s so unusual,” said Elizabeth Rowe, a law professor at the University of Florida in Gainesville who teaches this case to her students. “It’s a cautionary tale for lawyers representing potential licensees because it can be a trap for the unwary.”Warner-Lambert was bought by Pfizer Inc. in 2000, and then J&J bought Pfizer’s consumer products division in 2006. Throughout all that time, the royalties have been paid -- every month for U.S. sales and every quarter for global sales.Lawrence’s heirs currently split about half of the royalties, Young said. The other half have had a twisted history over the past 70-plus years. Prominent New York real estate broker John Reynolds bought half, then donated it to the Archdiocese of New York, which in turn sold shares to universities, pension funds, hospitals and individuals.J&J wouldn’t comment on the auction or reveal how many people get a cut of Listerine sales.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Investor focus is likely to be on the impact of the coronavirus outbreak on J&J's (JNJ) performance when it reports second-quarter results.
Johnson & Johnson (NYSE: JNJ) has been a leader in the pharmaceutical industry for over 130 years. With a vast product portfolio and a 2.8% dividend yield, the stock remains popular with income investors despite a history of modest year-over-year gains.
Moderna (NASDAQ: MRNA) has a date with Congress. Officials from those companies will field questions from the committee's oversight and investigations subcommittee on the current state of their vaccine development processes.
The U.S. saw yet another day of record coronavirus casualties on Thursday, led mostly by a relentless surge in the stricken Sun Belt region.
Johnson & Johnson (JNJ) possesses the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
The groups, which include educational institutions such as Emory University and activist groups such as Greenpeace, among others, also want the company to recall existing inventory in North America. Janette Robinson Flint, the executive director of Black Women for Wellness, said in a statement that J&J's choice to continue marketing baby powder in international markets, often to Black and Brown consumers, contradicts a statement it issued in June committing to fighting racial inequality.
The U.S. topped 3 million coronavirus cases Wednesday after setting a new record of 60,000 daily cases in the previous day.
Johnson & Johnson (JNJ) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.
In the latest trading session, Johnson & Johnson (JNJ) closed at $142.85, marking a -0.09% move from the previous day.
Emergent BioSolutions (EBS) extends a five-year deal with J&J to provide its CDMO services to produce the drug substance of the latter's COVID-19 vaccine candidate. Shares rise.
AWS was already the largest cloud infrastructure platform in the world, and Amazon revealed it was highly profitable -- which could offset the lower margins of its core marketplace business. Locking customers into its Prime ecosystem -- which offered discounts, free shipping, streaming media, and other perks -- further widened its moat against its brick-and-mortar rivals.
Under the deal, starting next year Emergent will provide large-scale manufacturing services to produce the drug substance over five years, with the first two years valued at about $480 million. The news follows a $135 million deal struck by the two companies in April, to use Emergent's manufacturing facilities to speed up the development and production of its vaccine candidate.
In less than five weeks, the benchmark S&P 500 (SNPINDEX: ^GSPC) plunged 34%, representing the fastest bear market descent in history. Of the past eight bear markets, there have been 13 total corrections of at least 10% within the three years following a bear market bottom. This means the typical rise from a bear market bottom features one or two substantive corrections.
Early signs of the shift came Wednesday, when positive data for one of Pfizer Inc’s COVID-19 vaccine candidates sent shares of the large U.S. drugmaker up more than 3%. Although the news had little effect on shares of Pfizer’s large rivals in the vaccine race, smaller peers Moderna Inc and Inovio Pharmaceuticals Inc, both of which have previously shown promising COVID-19 data of their own, ended down more than 4% and 25%, respectively. For the week so far, shares of bigger players in the vaccine race, such as Johnson & Johnson and Merck , have also outperformed Inovio and Moderna.
A flurry of legal challenges is always a good reason for investors to be wary of a company. Lawsuits related to its talc-based products and the company's role in the opioid crisis present some of the biggest risks to long-term investors. Although J&J may be able to manage those legal challenges today, that doesn't mean it always will.
As two of the largest healthcare companies in the world, both Eli Lilly (NYSE: LLY) and Johnson & Johnson (NYSE: JNJ) have a role to play in well-balanced healthcare portfolios. With a profit margin of 23.8%, 15.1% year-over-year quarterly revenue growth, and trailing-12-month revenues of $23.1 billion, Eli Lilly exudes success.
Emergent BioSolutions has become the go-to manufacturing partner for companies looking to develop vaccines for the coronavirus.