J&J announces US$ 5 billion share buyback post exposé on its talc

By PharmaCompass

2018-12-20

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We all know that Johnson & Johnson’s (J&J) has been facing thousands of lawsuits alleging that its talc causes ovarian cancer and mesothelioma.

While J&J has always insisted that its baby powder is safe and pure, an exposé by Reuters said that the company knew for decades that the product contained cancer-causing asbestos.

The news had J&J’s stock tumbling down and wiped out about US$ 40 billion from its market value. As a result, on Monday, the company said it plans to buy back up to US$ 5 billion of its stock.

“Based on our continued strong performance and, more importantly, the confidence we have in our business going forward, the board of directors and management team believe that the company's shares are an attractive investment opportunity,” said Alex Gorsky, chairman and CEO.

The Reuters story is based on examination of internal documents. It says that from at least 1971 to the early 2000s, the company’s raw talc and finished powders sometimes tested positive for small amounts of asbestos, and that company executives, mine managers, scientists, doctors and lawyers fretted over the problem and how to address it while failing to disclose it to regulators or the public.

The documents also depict successful efforts to influence US regulators’ plans to limit asbestos in cosmetic talc products and scientific research on the health effects of talcum powders.

The earliest mentions of tainted J&J talc that Reuters found come from 1957 and 1958 reports by a consulting lab.

J&J was quick to deny any truth in the report. “Any suggestion that Johnson & Johnson knew or hid information about the safety of talc is false,” it said. On Monday, J&J took out a full-page advertisement in the New York Times titled “Science. Not Sensationalism,” saying it has scientific evidence its talc is safe and beneficial to use. “If we had any reasons to believe our talc was unsafe, it would be off our shelves,” the ad said.

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“ The article is based on the information available in public and which the author believes to be true. The author is not disseminating any information, which the author believes or knows, is confidential or in conflict with the privacy of any person. The views expressed or information supplied through this article is mere opinion and observation of the author. The author does not intend to defame, insult or, cause loss or damage to anyone, in any manner, through this article.”

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