Shares of Johnson & Johnson (JNJ) are slipping following media reports saying the company has lost its appeal to overturn a jury verdict that awarded $4.69B to 22 women who blamed their ovarian cancer on asbestos in the company’s baby powder and talc products.
J&J LOSES APPEAL: Johnson & Johnson has lost its appeal to overturn a jury verdict that awarded $4.69B to 22 women who blamed their ovarian cancer on asbestos in the company's baby powder and talc products, according to The New York Times. The verdict, one of the largest personal injury awards on record, was upheld by Judge Rex Burlison in a Missouri circuit court. Late last week, Reuters reported that the company was aware that its raw talc and finished powders sometimes tested positive for small amounts of asbestos and that they "fretted" over the problem and how to address it while failing to disclose it to regulators or the public. Citing documents and deposition and trial testimony, the publication said Johnson & Johnson failed to tell the U.S. Food and Drug Administration that at least three tests by three different labs from 1972 to 1975 had found asbestos in its talc, levels of which were "rather high" in one reported case. The documents also showed successful efforts to influence U.S. regulators' plans to limit asbestos in cosmetic talc products and scientific research on the health effects of talc, Reuters said. In response to the report, J&J issued a statement saying the article was "one-sided, false, and inflammatory." The company also claimed in the statement that its baby powder is "safe and asbestos-free."
TALC LAWSUITS: Johnson & Johnson has faced a slew of lawsuits alleging its talc products contain asbestos and have caused ovarian and other cancers. In July, J&J was ordered by a Missouri jury to pay $4.9B in a case involving 22 women and their families. In July, J&J Chairman and CEO Alex Gorsky told analysts that he was confident that the company's products do not contain asbestos. According to the company's August 2 quarterly report, talc cases make up fewer than 10% of all personal injury lawsuits that are pending against it. Reuters noted in a report that asbestos has a long latency period, with cancer diagnosis usually coming years after initial exposure. 20 years or longer for mesothelioma.
WHAT’S NOTABLE: India drug authorities went to some Johnson & Johnson facilities and got "tests and samples" of the company's talcum powder after regulators in the country began an investigation into the powder following a report saying J&J knew the product contained cancer-causing asbestos, according to Reuters, citing a company statement. "Today, a few of our facilities were visited by the CDSCO and local FDA authorities and we are fully co-operating with them by providing tests and samples. The characterization of these visits as 'raids' or 'seizures' is incorrect as has been reported in some instances. The tests have been conducted in the regular way that the FDA collects samples," Johnson & Johnson said, adding the safety of its talc was based on a history of safe use and decades of research.
PRICE ACTION: In afternoon trading, shares of Johnson & Johnson have dropped 1.4% to $128.62.