Johnson & Johnson shares dropped 6% on Tuesday even though its third-quarter results matched Wall Street expectations and the company raised its 2026 financial guidance. RBC Capital Markets analyst Trung Huynh attributed the decline to "underwhelming" performance in the medical device business and a lack of near-term catalysts, calling the sell-off "excessive" and emblematic of broader market volatility that sets a "negative tone" for the sector as earnings season begins.
In dealmaking, Gilead Sciences and Vir Biotechnology announced a collaboration to develop three "dual-masked" T cell engagers for solid tumors. Vir will receive $135 million in upfront and near-term payouts and could earn up to $1.74 billion more if milestones are met. Separately, Pfizer partnered with Enodia Therapeutics on small molecules targeting the Sec61 protein gateway, with potential payments exceeding $500 million.
Syndax Pharmaceuticals said its drug Niktimvo failed a mid-stage trial in idiopathic pulmonary fibrosis, missing the primary endpoint of improving breathing capacity versus placebo. The company will stop developing Niktimvo in that indication but stressed the findings don't affect other ongoing studies. In regulatory news, the FTC and seven states asked a court to hold Martin Shkreli in civil contempt for allegedly violating a lifetime pharma ban by trading in more than 60 industry stocks and commenting on companies via social media.