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J&J Dips 10% as Reuters Says Company Knew of Asbestos in Talc
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Johnson & Johnson’s (JNJ - Free Report) stock was down more than 10% on Friday, after Reuters reported that the pharma giant knew for decades that its baby powders contained asbestos.
J&J has more than 11,000 cases pending related to its baby powders containing talc in the United States. Most of these lawsuits allege that its talc-based products, including its baby powders, contain asbestos, which causes its users to develop ovarian cancer.
So far this year, J&J’s stock has declined 4.8% against an increase of 5% recorded by the industry.
Reuters, in its article, said that an examination of J&J’s internal reports and other confidential documents showed that from 1971 to early 2000s, its raw talc and finished powders sometimes tested positive for trace amounts of asbestos. The internal reports and other confidential documents were released as part of a lawsuit by plaintiffs.
J&J issued a statement where it called the reports by Reuters “one-sided, false, and inflammatory”.
Though J&J has successfully defended a number of lawsuits related to its baby powders, there have been verdicts against the company. A major verdict was given in July per which J&J was ordered by a jury in a St. Louis court to pay $4.69 billion in damages to 22 women who alleged that its baby powders contained asbestos, which caused them to develop ovarian cancer. The damages comprised $550 million in compensatory damages and $4.14 billion in punitive damages. In August, a judge at the Missouri trial court affirmed the jury’s verdict, ordering J&J to pay a hefty fine of $4.69 billion. J&J vowed to appeal then.
J&J has been consistently denying allegations. It has maintained in public statements that its talc products are completely safe and do not cause cancer. In its latest statement, J&J said that independent tests by regulators, academic institutions and leading labs have proven that its talc-based products have never contained asbestos.
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.
It has been suggested that a link between talc and cancer may be due to the fact that talc and asbestos often occur together in deposits and it gets inadvertently mixed.
The talc issue has been an overhang on J&J’s stock price for a while given the controversy surrounding this.
Other top-ranked large-cap pharma stocks are Merck & Co., Inc. (MRK - Free Report) , Eli Lilly & Company (LLY - Free Report) and Roche Holding AG (RHHBY - Free Report) , all three carrying a Zacks Rank #2 (Buy).
Merck’s earnings estimates have increased by 1.4% for 2018 and 1.3% for 2019 over the past 60 days. The company’s shares have increased 35.9% this year so far.
Lilly’s earnings estimates have increased 2% for 2018 and 0.2% for 2019 over the past 60 days. The company’s shares have increased 32.5% this year so far.
Roche’s earnings estimates for 2018 have gone up 0.9% while that for 2019 have moved up 2.6% in the past 60 days.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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J&J Dips 10% as Reuters Says Company Knew of Asbestos in Talc
Johnson & Johnson’s (JNJ - Free Report) stock was down more than 10% on Friday, after Reuters reported that the pharma giant knew for decades that its baby powders contained asbestos.
J&J has more than 11,000 cases pending related to its baby powders containing talc in the United States. Most of these lawsuits allege that its talc-based products, including its baby powders, contain asbestos, which causes its users to develop ovarian cancer.
So far this year, J&J’s stock has declined 4.8% against an increase of 5% recorded by the industry.
Reuters, in its article, said that an examination of J&J’s internal reports and other confidential documents showed that from 1971 to early 2000s, its raw talc and finished powders sometimes tested positive for trace amounts of asbestos. The internal reports and other confidential documents were released as part of a lawsuit by plaintiffs.
J&J issued a statement where it called the reports by Reuters “one-sided, false, and inflammatory”.
Though J&J has successfully defended a number of lawsuits related to its baby powders, there have been verdicts against the company. A major verdict was given in July per which J&J was ordered by a jury in a St. Louis court to pay $4.69 billion in damages to 22 women who alleged that its baby powders contained asbestos, which caused them to develop ovarian cancer. The damages comprised $550 million in compensatory damages and $4.14 billion in punitive damages. In August, a judge at the Missouri trial court affirmed the jury’s verdict, ordering J&J to pay a hefty fine of $4.69 billion. J&J vowed to appeal then.
J&J has been consistently denying allegations. It has maintained in public statements that its talc products are completely safe and do not cause cancer. In its latest statement, J&J said that independent tests by regulators, academic institutions and leading labs have proven that its talc-based products have never contained asbestos.
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.
It has been suggested that a link between talc and cancer may be due to the fact that talc and asbestos often occur together in deposits and it gets inadvertently mixed.
The talc issue has been an overhang on J&J’s stock price for a while given the controversy surrounding this.
J&J currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other top-ranked large-cap pharma stocks are Merck & Co., Inc. (MRK - Free Report) , Eli Lilly & Company (LLY - Free Report) and Roche Holding AG (RHHBY - Free Report) , all three carrying a Zacks Rank #2 (Buy).
Merck’s earnings estimates have increased by 1.4% for 2018 and 1.3% for 2019 over the past 60 days. The company’s shares have increased 35.9% this year so far.
Lilly’s earnings estimates have increased 2% for 2018 and 0.2% for 2019 over the past 60 days. The company’s shares have increased 32.5% this year so far.
Roche’s earnings estimates for 2018 have gone up 0.9% while that for 2019 have moved up 2.6% in the past 60 days.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>