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J&J (JNJ) Recalls Baby Powder Batch as FDA Finds Asbestos
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Shares of Johnson & Johnson (JNJ - Free Report) fell more than 6% on Friday after it announced voluntary recall of one lot of Johnson’s Baby Powder product in the United States. The recall was initiated following a test done by the FDA, which revealed traces of asbestos, a known carcinogen, in samples from one bottle purchased online.
J&J said that it has initiated an investigation into the matter. It said it is working with the FDA to find out the validity of the test as well as whether the tested product was authentic or counterfeit. J&J also said it is not sure whether cross-contamination of the sample caused a false positive or whether the product was appropriately sealed and maintained in a controlled environment.
J&J’s stock has declined 1.1% this year so far compared with a decrease of 0.3% recorded by the industry.
The recall comes at a time when J&J faces more than 15,000 lawsuits, which claim that its talc-based products contain asbestos, causing many women to develop ovarian cancer. In 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 given earlier. J&J has appealed the decision and insists that talc-based products are safe and do not cause cancer.
In July this year, there were reports that the drug giant is facing criminal investigation by the U.S. Department of Justice into whether it lied to the public about the possible cancer risks of its talc-based products and the company knew more details than it let on.
In December 2018, a Reuters article stated that the company knew for decades that its baby powders contained asbestos. 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. The latest recall, however, questions J&J’s claims that the product is safe.
Coming back to the latest recall, J&J affirmed that its cosmetic talc is safe and years of testing, including some done by the FDA, proved that its talc-based products never contained asbestos. Per the company, independent tests by regulators, academic institutions and leading labs have proven that its powders are asbestos-free and safe. The FDA, on the other hand, said it stands by the quality of its testing and advised consumers to stop using the recalled/affected products
The link between talc and cancer has been rumored for decades but remains scientifically unproven. 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 get inadvertently mixed. Along with the latest release, the FDA said that if talc mining sites are not selected carefully and steps are not taken to purify the talc ore sufficiently, there are chances of the talc being contaminated with asbestos.
The FDA said that since 2018, it has tested approximately 50 cosmetic products that contain talc including two samples of Johnson’s Baby Powder. Of these, while one sample did show traces of asbestos, the other tested negative for the same.
The talc issue has been an overhang on J&J’s stock price for a while and is expected to remain so.
Other than the talc-lawsuits, J&J also faces thousands of other lawsuits related to abuse of its opioid-based drugs. These lawsuits claim that J&J is one of the several companies whose opioid-based drugs were responsible for fueling the respective state’s opioid epidemic. Earlier this month, J&J settled with two counties of Ohio for $10 million plus other cost reimbursements, in connection with the multi-district opioid case in Ohio. Other than J&J, Allergan , Teva Pharmaceutical Industries (TEVA - Free Report) , Mallinckrodt , Endo International and Purdue Pharma are some of the other companies that have been accused of fueling the opioid crisis,
J&J also faces more than 13,000 lawsuits alleging that use of its antipsychotic drug, Risperdal causes enlargement of breast tissues in boys. This month, a Philadelphia jury ordered J&J to pay punitive damages of $8 billion to a man who claimed that the use of Risperdal caused him to develop gynecomastia (enlarged breasts).
These lawsuits have raised uncertainty about the company. A group of analysts, however, believe J&J is strong enough to handle the legal issues.
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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J&J (JNJ) Recalls Baby Powder Batch as FDA Finds Asbestos
Shares of Johnson & Johnson (JNJ - Free Report) fell more than 6% on Friday after it announced voluntary recall of one lot of Johnson’s Baby Powder product in the United States. The recall was initiated following a test done by the FDA, which revealed traces of asbestos, a known carcinogen, in samples from one bottle purchased online.
J&J said that it has initiated an investigation into the matter. It said it is working with the FDA to find out the validity of the test as well as whether the tested product was authentic or counterfeit. J&J also said it is not sure whether cross-contamination of the sample caused a false positive or whether the product was appropriately sealed and maintained in a controlled environment.
J&J’s stock has declined 1.1% this year so far compared with a decrease of 0.3% recorded by the industry.
The recall comes at a time when J&J faces more than 15,000 lawsuits, which claim that its talc-based products contain asbestos, causing many women to develop ovarian cancer. In 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 given earlier. J&J has appealed the decision and insists that talc-based products are safe and do not cause cancer.
In July this year, there were reports that the drug giant is facing criminal investigation by the U.S. Department of Justice into whether it lied to the public about the possible cancer risks of its talc-based products and the company knew more details than it let on.
In December 2018, a Reuters article stated that the company knew for decades that its baby powders contained asbestos. 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. The latest recall, however, questions J&J’s claims that the product is safe.
Coming back to the latest recall, J&J affirmed that its cosmetic talc is safe and years of testing, including some done by the FDA, proved that its talc-based products never contained asbestos. Per the company, independent tests by regulators, academic institutions and leading labs have proven that its powders are asbestos-free and safe. The FDA, on the other hand, said it stands by the quality of its testing and advised consumers to stop using the recalled/affected products
The link between talc and cancer has been rumored for decades but remains scientifically unproven. 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 get inadvertently mixed. Along with the latest release, the FDA said that if talc mining sites are not selected carefully and steps are not taken to purify the talc ore sufficiently, there are chances of the talc being contaminated with asbestos.
The FDA said that since 2018, it has tested approximately 50 cosmetic products that contain talc including two samples of Johnson’s Baby Powder. Of these, while one sample did show traces of asbestos, the other tested negative for the same.
The talc issue has been an overhang on J&J’s stock price for a while and is expected to remain so.
Other than the talc-lawsuits, J&J also faces thousands of other lawsuits related to abuse of its opioid-based drugs. These lawsuits claim that J&J is one of the several companies whose opioid-based drugs were responsible for fueling the respective state’s opioid epidemic. Earlier this month, J&J settled with two counties of Ohio for $10 million plus other cost reimbursements, in connection with the multi-district opioid case in Ohio. Other than J&J, Allergan , Teva Pharmaceutical Industries (TEVA - Free Report) , Mallinckrodt , Endo International and Purdue Pharma are some of the other companies that have been accused of fueling the opioid crisis,
J&J also faces more than 13,000 lawsuits alleging that use of its antipsychotic drug, Risperdal causes enlargement of breast tissues in boys. This month, a Philadelphia jury ordered J&J to pay punitive damages of $8 billion to a man who claimed that the use of Risperdal caused him to develop gynecomastia (enlarged breasts).
These lawsuits have raised uncertainty about the company. A group of analysts, however, believe J&J is strong enough to handle the legal issues.
J&J currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>