Johnson & Johnson shares slip after talc asbestos claims
Shares of health products giant Johnson & Johnson slipped a further 2% on Monday, extending steep losses suffered on Friday following an investigation by the Reuters news agency alleging that the company knew for decades that cancer-causing asbestos lurked in its bestselling Baby Powder talc.
Johnson & Johnson shares had closed down 10% on Friday, wiping out about $40bn from the company’s market capitalization.
The company knew about the presence of small amounts of asbestos in its products as early as 1971, a Reuters examination of company memos, internal reports and other confidential documents showed. The healthcare conglomerate is already facing thousands of lawsuits alleging that its talcum powder causes cancer.
J&J insists on the safety and purity of its product, Reuters reported. But internal documents examined by Reuters and published in a report on Friday demonstrate, the agency said, that the company’s powder was sometimes tainted with carcinogenic asbestos – and that J&J kept that information from regulators and the public.
In response to the report, the company said on Friday “any suggestion that Johnson & Johnson knew or hid information about the safety of talc is false” .
On Monday, the company took out a full-page advertisement in the New York Times titled “Science. Not Sensationalism”, saying it has scientific evidence its talc is safe and beneficial to use. “If we had any reasons to believe our talc was unsafe, it would be off our shelves,” the ad said.
“Talc is a common mineral that’s part of all of our lives. It’s in our foods. Our cosmetics. Our gyms. And yes, it’s in Johnson’s Baby Powder,” the ad read. The company asserted that it “only uses pure, pharmaceutical-grade talc”.
J&J’s chief executive, Alex Gorsky, in his first public statement since the Reuters story was published, is scheduled to appear on TV on the CNBC cable business news channel on Monday evening.
But Reuters reported that damning material is emerging as J&J has been compelled to share company memos, internal reports and other confidential documents with lawyers for some of the 11,700 plaintiffs now claiming that the company’s talcum powder caused their cancers – including thousands of women with ovarian cancer.
The company’s raw talc and finished powders have sometimes tested
positive for small amounts of asbestos, and company executives, mine managers, scientists, doctors and lawyers fretted over the problem and how to address it while failing to disclose it to regulators or the public, Reuters alleged. Johnson & Johnson has insisted: “Our talc is safe.” Reuters stated that the company had referred all its inquiries during the compilation of its report to its outside litigation counsel, Peter Bicks. In emailed responses, Bicks rejected Reuters’ findings as “false and misleading”.