Report Says Johnson & Johnson Knew About Asbestos in its Baby Powder

Shares of Johnson & Johnson were tumbling after Wall Street learned about a report that claimed the company knew about asbestos in its baby powder for a long time.

The stock lost nearly $40 billion in market value on Friday as traders reacted to a Reuters story that said that Johnson & Johnson was aware for decades that its baby powder had asbestos.

The company denied the allegation and said the story was “one-sided, false and inflammator.” The Johnson & Johnson also called the story an “absurd conspiracy theory.”

The drop on Friday was the worst trading day for the stock in over 15 years and the fifth worst trading day on record.

According to Larry Biegelsen, an analyst with Wells Fargo, the sell off was an “over-reaction.”

Biegelsen said that even if J&J settled all 11,700 cases for $280,000 each, the highest per-case settlement amount among the cases it has followed, the total liability would be $3.3 billion.

J.P. Morgan analyst Chris Schott also said the legal risk probably won’t come close to the amount J&J lost in market value Friday.

Johnson & Johnson’s full statement in response to the Reuter’s story was:
The Reuters article is one-sided, false and inflammatory. Johnson & Johnson’s baby powder is safe and asbestos-free. Studies of more than 100,000 men and women show that talc does not cause cancer or asbestos-related disease. Thousands of independent tests by regulators and the world’s leading labs prove our baby powder has never contained asbestos.

J&J attorneys provided Reuters with hundreds of documents and directly responded to dozens of questions in order to correct misinformation and falsehoods. Notwithstanding this, Reuters repeatedly refused to meet with our representatives to review the facts and refused to incorporate much of the material we provided them.

The Reuters article is wrong in three key areas:

The article ignores that thousands of tests by J&J, regulators, leading independent labs, and academic institutions have repeatedly shown that our talc does not contain asbestos.

The article ignores that J&J has cooperated fully and openly with the U.S. FDA and other global regulators, providing them with all the information they requested over decades. We have also made our cosmetic talc mines and processed talc available to regulators for testing. Regulators have tested both, and they have always found our talc to be asbestos-free.

The article ignores that J&J has always used the most advanced testing methods available to confirm that our cosmetic talc does not contain asbestos. Every method available to test J&J’s talc for asbestos has been used by J&J, regulators, or independent experts, and all of these methods have all found that our cosmetic talc is asbestos-free.

Johnson & Johnson will continue to defend the safety of our product. For the truth and facts about talc, please go to www.factsabouttalc.com.

Disclaimer: We have no position in Johnson & Johnson (NYSE: JNJ) and have not been compensated for this article.