Reuters based its report on a review of documents and deposition and trial testimony. It said the review showed that from 1971 to the early 2000s, J&J executives, mine managers, doctors and lawyers were aware the company's raw talc and finished powders sometimes tested positive for small amounts of asbestos. Those involved discussed the problem but they did not disclose it to regulators or the public, Reuters' examination found.
By late morning Friday, J&J stock was down 10.8 percent, on pace for its worst day in more than a decade, when its shares closed down 15.85 on July 19, 2002.
On top of likely being the stock's biggest drop since 2002, the plunge was likely a shock for shareholders used to a boring consumer staple that moves in much steadier increments than the overall market and more volatile stocks. J&J's stock beta over the last five years is 0.72, meaning that it swings much less than the market on a daily basis (a beta of 1 would mean it moves equal to the market and greater than 1 means it is more volatile than the S&P 500).
"Plaintiffs' attorneys out for personal financial gain are distorting historical documents and intentionally creating confusion in the courtroom and in the media," Ernie Knewitz, J&J's vice president of global media relations, told Reuters in an email. "This is all a calculated attempt to distract from the fact that thousands of independent tests prove our talc does not contain asbestos or cause cancer. Any suggestion that Johnson & Johnson knew or hid information about the safety of talc is false."
J&J referred Reuters to its outside lawyers, who rejected Reuters' findings as "false and misleading."
"The scientific consensus is that the talc used in talc-based body powders does not cause cancer, regardless of what is in that talc," Peter Bicks told Reuters in an email. "This is true even if — and it does not — Johnson & Johnson's cosmetic talc had ever contained minute, undetectable amounts of asbestos." He dismissed the tests cited in Reuter's article as "outlier" results, Reuters said.
The company has faced a wave of lawsuits alleging its talc baby powder products contain asbestos and caused ovarian and other cancers. Some juries have sided with J&J and others have been unable to reach verdicts. A Missouri jury in July ordered J&J to pay $4.9 billion in a case involving 22 women and their families. A judge affirmed the verdict in August and J&J vowed to appeal it.
J&J has filed thousands of documents in court proceedings, though most have been designated as confidential.
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