In its worst trading day in 15 years, on Friday December 14 Johnson & Johnson (J&J) recorded losses of almost $40bn following a report by Reuters claiming that the company knew for decades that its baby powder contained asbestos.
J&J responded to the allegations in a statement claiming that the story was "one-sided, false and inflammatory" and added that "the Reuters story is an absurd conspiracy". However, the allegations were still well-reflected in the stock market on Friday when the company lost $39.8bn in market value in just one day, driving shares down by around 10% of their original value to close to $133 a share.
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J&J closed the day on a value of $356.7bn.
The Reuters report outlined that thousands of lawsuits have been filed against J&J's talc-based baby powder for containing asbestos which has led to the development of a number of cancer diagnosis. The report analyzed various documents produced as part of the trials and revealed that from at least 1971 to the early 2000s the firm's internal tests occasionally found small amounts of asbestos in its raw talc.
Attorney Peter Bicks told Reuters in an email that "the scientific consensus is that the talc used in talc-based body powders does not cause cancer, regardless of what is in that talc.
"This is true even if – and it does not – Johnson & Johnson's cosmetic talc had ever contained minute, undetectable amounts of asbestos."