Shares in medical group Johnson & Johnson (JNJ) were flat today as thousands of Brits get set to take it to court claiming its former talcum powder product causes cancer.
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Asbestos Link
Over 3,000 people are claiming that they or a family member developed forms of ovarian cancer or another type of cancer called mesothelioma from using Johnson’s baby powder between 1965 and 2023.
A lawsuit has been filed by KP Law at the High Court in London seeking damages against J&J and Kenvue (KVUE) UK, which was split from the former in 2023 and now operates as a separate business.
The lawsuit alleges that Johnson & Johnson was aware as early as the 1960s that its mineral-based talcum powder contained fibrous forms of talc, as well as tremolite and actinolite. Both minerals – when in their fibrous form – are classified as asbestos and linked to potentially deadly cancers.
The court papers allege that, despite knowing the minerals were directly linked to cancers, J&J never issued warnings on the packaging of its baby powder.
JNJ denies the allegation as well as any claims it knowingly sold baby powder contaminated with asbestos.
A statement, issued on behalf of the firm, said its baby powder “was compliant with any required regulatory standards, did not contain asbestos, and does not cause cancer.”
This could be a challenging moment for JNJ and its stock price given that legal and regulatory cases are a key risk for the business and its investors – see above.
U.S. Cases
Kenvue said in a statement that J&J baby powder “did not contain asbestos, and does not cause cancer.”
JNJ stopped selling talc-based baby powder in the U.S. in 2020, switching to a cornstarch product and did the same globally in 2023.
J&J is separately facing tens of thousands of lawsuits in America, where claimants allege they were diagnosed with cancer after using baby powder and other talc products.
Last week, J&J was ordered to pay $966 million to the family of a woman who died from mesothelioma, one of the largest awards against the firm, although the amount could be reduced on appeal.
The company has been attempting to resolve thousands of cancer lawsuits by filing for bankruptcy through one of its subsidiaries. The strategy behind this is that the company could use the bankruptcy process to create a settlement fund, which would allow it to pay out a lump sum to claimants and resolve the lawsuits efficiently.
However, the $10 billion plan has been regularly rejected by the courts.
Is JNJ a Good Stock to Buy Now?
On TipRanks, JNJ has a Moderate Buy consensus based on 14 Buy and 7 Hold ratings. Its highest price target is $225. JNJ stock’s consensus price target is $207, implying an 8.36% upside.
