Advertise with

J&J said that the healthcare conglomerate will come out on the winning side of thousands of legal claims over its baby powder and opioid products.
J&J said that the healthcare conglomerate will come out on the winning side of thousands of legal claims over its baby powder and opioid products.

Johnson & Johnson certain it will prevail in baby powder and opioid lawsuits


By Jef Feeley - Jul 17th, 14:00

Johnson & Johnson (J&J) said that the healthcare conglomerate will come out on the winning side of thousands of legal claims over its baby powder and opioid products.

Last week, Bloomberg reported that the US justice department was pursuing a criminal investigation into whether J&J lied about possible cancer risks of its talcum powder. The company, which is facing more than 14,000 lawsuits over the products, shed more than $15bn in market value Friday in the wake of the news.

On Tuesday, J&J CFO Joseph Wolk called the talc litigation “big business for the plaintiffs’ attorneys to target companies seeking large settlements”, in an interview with Bloomberg TV.

“We know that the department of justice is an astute organisation and we trust that they’re going to come to the same conclusion that we have, and that’s that the company acted responsibly,” he said.

Growing legal risks

J&J has underperformed the broader market in 2019, as investors have raised concerns over the company’s growing legal risks. The shares were down 1% to $133.36 at 10.39am in New York

“While litigation continues to be an overhang for the company, we view the risk as manageable given JNJ’s strong financial position,” Edward Jones analyst Ashtyn Evans said in a note to investors. “We believe shares are attractively valued.”

The company reported second-quarter adjusted earnings on Tuesday that beat analysts’ estimates. It also said it had set aside $190m for talc-related defence costs in the second quarter. Bloomberg Intelligence estimates that civil settlements could cost J&J as much as $15bn overall, though the company says it has no liability because the products are safe.

J&J also faces more than 1,900 local US government lawsuits against drugmakers and distributors over the opioid epidemic. The company is in the middle of a trial in Oklahoma, which has sued under the state’s public-nuisance law, in a bellwether case that could affect a far larger, consolidated set of lawsuits by states and local governments.

Wolk told said during a call with analysts Tuesday that J&J’s opioids account for only a sliver of the total market.

“This is not about Johnson and Johnson products. It’s about the opioid epidemic,” Wolk said.

J&J also raised its revenue guidance for 2019, as strong sales in its pharmaceutical unit helped cushion a decline in the consumer and medical technology businesses.

Business Live 

Related News

Woolworths carves out market share in SA
27/11/2019 - 10:11
In Australia, David Jones's sales declined 2.1%, with the company saying a store refurbishment contributed to the decline.

Push and pull strategies work together to keep consumers coming back for more
26/11/2019 - 10:20
The retail sector is under increasing pressure as consumers have shrinking disposable income in a strained economy. Maintaining share of wallet is critical. Relying solely on a push route to market strategy from manufacturers into retailers is not enough to get consumers buying products. A pull strategy needs to coexist with the push to drive brand consumption. Integrating these strategies requires intelligent and insightful decision-making. This, in turn, requires data generated through smart technology which provides line of sight across the value chain from manufacturer to distribution, retailer to the consumer.

Today’s customers are loyal to speed and convenience, not brands
25/11/2019 - 11:15
Consumer expectations are rapidly shifting as technologies such as mobile, geolocation, social media and increasingly, Internet of Things devices and wearables, connect people to a world of easily accessible information and convenient services. With the ability to browse, compare and order with a few swipes and taps, consumers are becoming trained to value convenience and service above nearly anything else.

Gearing FMCG manufacturing for the red season spike and maximising profits all year round
25/11/2019 - 11:03
As we enter the festive season, demand for Fast-Moving Consumer Goods (FMCG) increases rapidly, often leaving manufacturers scrambling to fulfill orders from their distribution channel. If demand cannot be met, then loss of revenue is inevitable. However, over-production is not an ideal solution either, as it can leave manufacturers sitting with unsold stock that costs money to store.

Black Friday not necessarily a “black & white” decision for small business growth
25/11/2019 - 10:52
Black Friday, once only a North American marketing frenzy, has become a critical entry in the calendars of South African retail business owners.