Johnson & Johnson shares tumble over talc scandal

Shares of Johnson & Johnson (J&J) tumbled 12 per cent yesterday and were on track to post their biggest percentage drop in more than 16 years after Reuters reported that the pharma major knew for decades that cancer-causing asbestos lurked in its Baby Powder. The decline in shares erased about $47 billion from the company’s market capitalisation.

“It is not surprising that an article from Reuters outlining years of potential knowledge regarding the perils of talc should agitate investors,” BMO Capital Markets analyst Joanne Wuensch said. “This is not a simple matter, as there are more than 10,000 pending cases.”

J&J was found to have known about the presence of small amounts of asbestos in its products from as early as 1971, a Reuters examination of company memos, internal reports and other confidential documents showed. The Reuters report also showed the company had commissioned and paid for studies conducted on its Baby Powder franchise.