Halda and the Price of Early ScienceNarrow moat

Johnson & Johnson (JNJ) — moat facet

J&J pays billions for early-stage science and writes off a few hundred million of it a year, which is the cost of owning many options.

Some of J&J's purchases buy a product; others buy a laboratory's idea. Halda Therapeutics, completed on 26 December 2025 for approximately $3.05 billion net of cash acquired, is a clinical-stage company with a platform to develop oral targeted therapies for solid tumours including prostate cancer1. It was accounted for as a business combination, with the goodwill placed in Innovative Medicine2.

Bought research and its write-offs ($M)1,783AcquiredIPR&D 2024385AcquiredIPR&D 2025313Impaired 2023211Impaired 202481Impaired 2025J&J Form 10-K FY2025
Write-offs fell as the spending fell.

Earlier-stage deals are cheaper per deal and riskier per dollar. J&J paid $1,783 million in 2024 and $385 million in 2025 for acquired in-process research and development and milestones3, and wrote off in-process research of $313 million in 2023, $211 million in 2024 and $81 million in 20254. The largest single research item of 2024 was the $1.25 billion paid for the NM26 bispecific antibody through the Yellow Jersey acquisition5.

This is the moat's third part working as designed. A company with J&J's cash flow can buy options on many scientific approaches, and the impairments are the price of the ones that fail. The filing notes that apart from NM26, no individual project represented more than 5% of annual research and development expense6.

The weakness is that buying early science is also what every large competitor with cash does, so the prices are set in an auction. J&J's advantage is the development and commercial organisation that follows the purchase, not the purchase itself.

The pattern continued in 2026. Firefly Bio, bought for $1 billion in July, brings a degrader antibody conjugate platform aimed at hard-to-treat solid tumours, including KRAS-driven cancers7, and J&J booked it as an asset acquisition with an in-process research charge of about $1 billion8. Buying science this early means paying for the hope rather than the proof, and recording the cost immediately.

Halda was not cheap for a clinical-stage company. The price of approximately $3.05 billion9 was more than J&J paid for Ambrx, about $2.0 billion in 202410, and roughly three times the Firefly purchase of $1 billion11. Its platform aims at oral therapies for solid tumours including prostate cancer12, where Erleada already gives J&J a commercial foothold.

The advantage is narrow. What tests it is the ratio of in-process research impairments to acquired research spending over several years; rising write-offs would say J&J is paying auction prices for science that does not survive.

Moat trajectory: Holding steady

Early-stage deals continued in 2025 and 2026 with Halda and Firefly.

The number that tests this moat
Reported
In-process R&D impairments, 2025
$81M (from $313M in 2023)

Write-offs of bought research; a rising trend would say auction prices are buying science that fails.

Source: Johnson & Johnson Form 10-K, FY2025 ↗
⚠ Threats to the moat
⚠ THREAT 01
Firefly and Sail Arrive as Charges
Two small science deals in July 2026 took $0.64 off this year's adjusted earnings per share and $1.36 off next year's.
References
  1. ReportedHalda Therapeutics, completed on 26 December 2025 for approximately $3.05 billion net of cash acquired, is a clinical-stage company with a platform to develop oral targeted therapies for solid tumours including prostate cancer.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: consolidated sales, volume and price, geography, the three wholesalers, rebate accruals, costs, R&D and liquidity. — FY2025 · publ. 11 February 2026 · source ↗
  2. ReportedIt was accounted for as a business combination, with the goodwill placed in Innovative Medicine.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - financial statements and notes: income statement, balance sheet, cash flows, equity, segment income, acquisitions and geographic assets. — FY2025 · publ. 11 February 2026 · source ↗
  3. ReportedJ&J paid $1,783 million in 2024 and $385 million in 2025 for acquired in-process research and development and milestones, and wrote off in-process research of $313 million in 2023, $211 million in 2024 and $81 million in 2025.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: rebate accrual tables, research and development, cost of products sold, debt and liquidity. — FY2025 · publ. 11 February 2026 · source ↗
  4. ReportedJ&J paid $1,783 million in 2024 and $385 million in 2025 for acquired in-process research and development and milestones, and wrote off in-process research of $313 million in 2023, $211 million in 2024 and $81 million in 2025.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: rebate accrual tables, research and development, cost of products sold, debt and liquidity. — FY2025 · publ. 11 February 2026 · source ↗
  5. ReportedThe largest single research item of 2024 was the $1.25 billion paid for the NM26 bispecific antibody through the Yellow Jersey acquisition.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: consolidated sales, volume and price, geography, the three wholesalers, rebate accruals, costs, R&D and liquidity. — FY2025 · publ. 11 February 2026 · source ↗
  6. ReportedThe filing notes that apart from NM26, no individual project represented more than 5% of annual research and development expense.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 1 business: segments, competition, patents, the three largest products, royalties, collaboration partners and the regulatory table. — FY2025 · publ. 11 February 2026 · source ↗
  7. ReportedFirefly Bio, bought for $1 billion in July, brings a degrader antibody conjugate platform aimed at hard-to-treat solid tumours, including KRAS-driven cancers, and J&J booked it as an asset acquisition with an in-process research charge of about $1 billion.
    Johnson & Johnson announcement completing the acquisition of Firefly Bio, Form 8-K exhibit 99.1. — July 2026 · publ. 29 July 2026 · source ↗
  8. ReportedFirefly Bio, bought for $1 billion in July, brings a degrader antibody conjugate platform aimed at hard-to-treat solid tumours, including KRAS-driven cancers, and J&J booked it as an asset acquisition with an in-process research charge of about $1 billion.
    Johnson & Johnson announcement completing the acquisition of Firefly Bio, Form 8-K exhibit 99.1. — July 2026 · publ. 29 July 2026 · source ↗
  9. ReportedThe price of approximately $3.05 billion was more than J&J paid for Ambrx, about $2.0 billion in 2024, and roughly three times the Firefly purchase of $1 billion.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: consolidated sales, volume and price, geography, the three wholesalers, rebate accruals, costs, R&D and liquidity. — FY2025 · publ. 11 February 2026 · source ↗
  10. ReportedThe price of approximately $3.05 billion was more than J&J paid for Ambrx, about $2.0 billion in 2024, and roughly three times the Firefly purchase of $1 billion.
    Johnson & Johnson Form 10-K for fiscal 2024 - segment sales, the three wholesalers in 2023 and 2024, rebate accruals for 2023 and segment income for 2022. — FY2024 · publ. February 2025 · source ↗
  11. ReportedThe price of approximately $3.05 billion was more than J&J paid for Ambrx, about $2.0 billion in 2024, and roughly three times the Firefly purchase of $1 billion.
    Johnson & Johnson announcement completing the acquisition of Firefly Bio, Form 8-K exhibit 99.1. — July 2026 · publ. 29 July 2026 · source ↗
  12. ReportedIts platform aims at oral therapies for solid tumours including prostate cancer, where Erleada already gives J&J a commercial foothold.
    Johnson & Johnson Form 10-K for fiscal 2025 (year ended 28 December 2025) - Item 7 MD&A: Innovative Medicine segment, therapeutic-area and product sales analysis. — FY2025 · publ. 11 February 2026 · source ↗
Sources
Generated September 24, 2026