In a much-publicized verdict last week, a jury in Missouri awarded a total of $4.69 billion to 22 plaintiffs who had claimed that Johnson and Johnson’s (JNJ Quick QuoteJNJ - Free Report) talcum powder products had caused ovarian cancer. It’s the largest verdict so far in a series of lawsuits about the potential link between products that contain talc and cancer.

The number is certainly eye-popping – especially because this is only one of many similar suits currently winding their way through the courts – but does it spell real trouble for the widely held pharmaceutical giant?

Probably not.

J&J has pledged to appeal the verdict and notes that they have been successful in every previous appeal involving the talc-cancer link and that they believe that this case contains a larger number of reversible errors than previous cases that were sucessfully appealed.

The award by the jury was composed of $550 million in compensatory damages and $4.14 billion in punitive damages. Punitive damages are considerably more likely to be reduced or overturned on appeal as they generally require that the defendant acted with reckless negligence or with the intent of causing harm.

The link between talc and cancer has been rumored for decades, but remains scientifically unproven. Medical experts differ sharply on whether talc increases the risk of cancer in consumers who use it. The American Cancer Society notes that studies so far have produced mixed results, with some showing no link at all and some showing a slightly increased risk, adding “For any individual woman, if there is an increased risk, the overall increase is likely to be very small.”

The National Cancer Institute and the Food and Drug Administration concur that no connection has yet been established.

It has been suggested that a link between talc and cancer may be due to the fact that in its raw, mined form, talc sometimes contains trace amounts of asbestos. No asbestos has ever been found in any Johnson and Johnson product, though the mere suggestion by plaintiffs may have influenced the jury in this case.

It’s not uncommon for juries to award large verdicts to sympathetic plaintiffs, especially those who are dealing with debilitating illnesses - or who are the loved ones who have already died - but those verdicts tend to hold up only in cases where there is evidence that the defendant acted with purposeful disregard for the health and safety of others. There was no such evidence presented against J&J in this case.

JNJ shares are off a little over 2% since the verdict was announced, but investors show no signs of abandoning the blue-chip stalwart. For reference, the company has revenues of over $80 billion/year, spread across three divisions – Consumer, Pharmaceutical and Medical Devices. They are involved in virtually every aspect of health care and their products are ubiquitous everywhere from the medicine cabinet to the operating room.

JNJ shares are off 10% over the past year, lagging behind pharmaceutical giant Merck (MRK Quick QuoteMRK - Free Report) , which is up 11% over the same period.

JNJ reports Q2 results tomorrow and the Zacks Consensus Estimate is for earnings of $2.06/share on revenues of $20.25B.

These types of lawsuits provide great TV news fodder and the sheer dollar value of the initial awards can certainly spook investors, but on the whole, they're likely to be a tiny factor in the actual operating results of this diversified multi-national behemoth. Don't get spooked. The earnings report tomorrow and future guidance are much more important than sensational headlnes.

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