Johnson & Johnson talc litigation ‘hit another snag,’ says Citi

Citi says Johnson & Johnson’s talc litigation “hit another snag,” with the judge in the bankruptcy case denying management’s proposed prepackaged bankruptcy plan, the third unsuccessful attempt by the company. J&J will return to the tort system to attempt to resolve all the current ovarian cancer claims, the analyst tells investors in a research note. Encouragingly, the bankruptcy judge will allow a redo of the Daubert motion given the revised Rule 702, which will allow management to address most claims, says Citi. The firm believes that if management is successful, the company’s actual legal expenses will likely be lower than the previously proposed bankruptcy settlement of $8B. Citi has a suspended rating on Johnson & Johnson shares.