Johnson & Johnson (JNJ - Free Report) stock declined around 1.5% in after-hours trading after a Philadelphia jury ordered it to pay $8 billion in punitive damages in a case related to its antipsychotic drug, Risperdal.
The lawsuit filed by Nicholas Murray claimed that J&J did not warn of the risk that young men using Risperdal can develop enlarged breasts.
J&J faces more than 13,000 similar lawsuits alleging that use of Risperdal causes enlargement of breast tissues in boys — a condition known as gynecomastia. The latest award is the largest in the pending Risperdal lawsuits, which have been primarily filed in state courts in Pennsylvania, California, and Missouri. Earlier, a compensatory damage award of $680,000 was paid to Murray in the same lawsuit.
J&J responded by saying that the award was “grossly disproportionate" and was confident that the jury verdict will be overturned in the court. It said Risperdal’s label clearly mentioned the risks associated with the use of the medicine. However, the jury did not hear evidence related to this.
J&J’s stock has risen 2.1% this year so far against a decrease of 0.6% recorded by the industry.
J&J faces a slew of lawsuits, which allege personal injuries to patients caused by the use of its medicines, mainly its talc and opioid products.
J&J faces more than 15,000 lawsuits for its talc-based products, primarily its baby powders. The lawsuits allege that its talc products contain asbestos, which caused many women to develop ovarian cancer. In August 2018, J&J was ordered by a Missouri court to pay $4.7 billion in damages to 22 women who made such allegations, affirming a St. Louis court jury’s verdict in July. J&J intends to appeal the case.
In August 2019, J&J was ordered by a district court in Oklahoma to pay $572 million to the state of Oklahoma in connection with a lawsuit filed by the latter. Last week, J&J settled with two counties of Ohio for $10 million plus other cost reimbursements, in connection with the trial this month under the federal multidistrict litigation related to abuse of its opioid-based drugs— Duragesic, Nucynta and Nucynta ER. All these lawsuits claim that J&J is one of the several companies whose opioid-based drugs were responsible for fueling the state’s opioid epidemic.
J&J currently has a Zacks Rank #3 (Hold). Some better-ranked large-cap pharma stocks include AbbVie (ABBV - Free Report) , Sanofi (SNY - Free Report) and Merck (MRK - Free Report) , all with a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Sanofi have gained 3.6% this year so far. Earnings estimates for 2019 have risen 0.6% while that for 2020 have gone up by 1.4% over the past 90 days.
Merck’s stock is up 9% this year so far. Its earnings estimates have risen 3.8% for 2019 and 1.9% for 2020 over the past 90 days.
AbbVie’s earnings estimates for 2019 have risen 1.5% over the past 90 days.
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