The bad news keeps coming for Johnson & Johnson US: the company has announced a voluntary recall of its popular baby powder after some bottles were found to contain small amounts of asbestos.
Shares of J&J fell six percent on Friday (local time), making it the second worst-performing stock in the Dow Jones Industrial Average. The drop in J&J, along with a slide in Boeing, dragged down the broader market.
J&J’s stock is now down slightly in 2019. The company, along with other health care stocks, has lagged the broader market due to a series of legal concerns.
But J&J has arguably the greatest risk of all the top Big Pharma firms.
The company already has been dealing with lawsuits about whether it knew of asbestos in talcum powder.
Shares plummetted more than 10 percent in mid-December – their worst one-day drop since 2002 – after Reuters reported that J&J knew about an asbestos problem for decades.
Some women have alleged that their ovarian cancer was caused by exposure to J&J products with asbestos.
Prolonged exposure to asbestos has also been linked to cases of mesothelioma and lung cancer, according to some medical studies.
J&J said in a statement Friday that it “has a rigorous testing standard in place to ensure its cosmetic talc is safe and years of testing, including the FDA’s own testing on prior occasions – and as recently as last month – found no asbestos”.
“Thousands of tests over the past 40 years repeatedly confirm that our consumer talc products do not contain asbestos,” the company added.
How asbestos allegations aren’t the only legal headache for J&J
Earlier this month, a Pennsylvania jury also ruled that J&J must pay US$8 billion in punitive damages following a man’s claim that the company didn’t warn young men that they could grow breasts after using the antipsychotic drug Risperdal.
J&J is dealing with a series of other legal problems, most notably about the company’s role in the opioid addiction crisis. That could cost the company billions of dollars in settlement costs.
J&J says in its earnings releases – including its third-quarter results reported earlier this month – that it will not provide earnings guidance “because the company is unable to predict with reasonable certainty the ultimate outcome of legal proceedings”.
Ohio Attorney General Dave Yost also announced Thursday that J&J agreed to pay nearly US$117 million in a multistate settlement to resolve allegations about deceptive marketing of transvaginal surgical mesh devices that are used to treat bladder problems.
The company was sued by women who allege they were injured by the devices.
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