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Johnson and Johnson Update

Johnson and Johnson Stock and Shareholder News Updates

Johnson and Johnson Lawsuit Update: Analysis: J&J Faces Over 50,000 Total Lawsuits / $6B in Settlement Costs Over Talc, Hips, And Xarelto Alone

August 27, 2019
Author: Daniel Gala

Consumer-goods, pharmaceutical, and medical-device mega-conglomerate Johnson & Johnson presently faces over 50,000 total lawsuits, the cost of settling which could run upwards of $6 billion, according to an analysis published August 26 on forbes.com. The figures cover only lawsuits over talcum powder, hip implants, and the blood-thinner Xarelto, and do not include thousands of other lawsuits faced by J&J over mesh implant devices made by its subsidiary Ethicon or over the company’s alleged role in the ongoing opioid epidemic, which could cost the company billions more.

“Johnson & Johnson (NYSE:JNJ) has been facing several lawsuits over its different products, including talc, hip-plants [sic], and the blood thinner, Xarelto,” the analysis by the Trefis Team and Great Speculations states. “There are a total of around 50,000 such cases against the company…[I]f [J&J] were to settle all of the above 50,000 cases, it would cost the company north of $6 billion, in our view.”

Despite this staggering figure (which may actually be a severe underestimate, see below), the analysts say J&J easily could cover this amount with the its massive stockpile of cash.

“Johnson & Johnson is capable of settling all the claims if need be from its cash in hand of $14 billion,” the report says.

Of the 50,000 total lawsuits, 14,000 claims involve talcum powder; 6,000 involve so-called “hip-plants”; 4,500 involve artificial hips; and 25,000 involve the blood-thinner Xarelto.

The vast majority of the 12,000 active talcum powder lawsuits have been centralized as multidistrict litigation (MDL) in the District of New Jersey. Multicounty legislation (MCL) also has been established to handle New Jersey state court claims. The lawsuits allege that Johnson & Johnson for decades has concealed known risks relating to its talcum-powder products, including its flagship product Johnson’s Baby Powder, ignoring evidence that the talc in its products contains asbestos, which is closely associated with the deadly and painful cancer mesothelioma, and that regular talcum powder use in the genital area can cause ovarian cancer in women.

The analysis posted to Forbes.com estimates that a talc settlement would cost J&J roughly $280,000 per claim for a total of approximately $4 billion.

However, this analysis either ignores a number of existing adverse verdicts against the company or assumes that a number of state court verdicts against J&J over talc-related claims will be overturned. For example, in July 2018, a St. Louis-based jury ordered J&J and its talc supplier to pay $4.6 billion in damages to 22 women and their families, who alleged that the women developed mesothelioma or ovarian cancer following years of use of J&J talcum-powder products. This $4.6 billion verdict alone exceeds the analysts’ $4 billion estimate for talc claims.

Meanwhile, it is estimated that J&J faces about 10,500 lawsuits over “hip-plants” and artificial hip devices made by its unit DePuy Orthopaedics and that settling these claims would cost roughly $1.8 billion with an average settlement of approximately $180,000.

The authors further estimate that J&J faces roughly 25,000 Xarelto lawsuits, which the company should be able to settle for an average of $31,000 for a total of about $775 million.

Source:

Trefis Team and Great Speculation. (26 August 2019). How Much Will It Cost Johnson & Johnson To Settle Most Of Its Lawsuits?

Johnson and Johnson Stock Update: Johnson and Johnson Shareholders To Receive Dividend Despite Company’s Ongoing Lawsuits Over Talc, Ethicon Mesh, DePuy Hips

March 5, 2019
Author: Daniel Gala

Despite the company and several of its wholly-owned subsidiaries continuing to be embroiled in serious products liability litigation brought by tens of thousands of plaintiffs in countries around the globe, Johnson & Johnson shareholders are to receive a quarterly dividend payable March 12, 2019, according to a company press release.

On January 2, Johnson & Johnson announced that “its Board of Directors had declared a cash dividend for the first quarter of 2019 of $0.90 per share of the company’s common stock. The dividend is payable on March 12, 2019 to shareholders of record at the close of business on February 26, 2019.”

“Today, as the world’s largest and most broadly-based health care company, we are committed to using our reach and size for good,” Johnson & Johnson’s press release reads. “We are blending our heart, science and ingenuity to profoundly change the trajectory of health for humanity.”

Here is quick rundown of just some of the products liability claims facing Johnson & Johnson and its subsidiaries, according to the company’s most recent filing with the US Securities and Exchange Commission (SEC);

Johnson and Johnson Product Liability Claims

  • Depuy Orthopaedics, Inc. has resolved more than 10,000 claims in the United States alone alone over its ASR XL Acetabular System and ASR Hip Resurfacing System, both of which are used in hip-replacement surgery
  • DePuy and Johnson & Johnson also face thousands of lawsuits related to the Pinnacle Acetabular Cup System, also used in hip-replacement surgery. These claims have been consolidated as multi-district litigation (MDL) in the Northern District of Texas
  • Johnson & Johnson and its unit Ethicon, Inc. have been sued by thousands of patients around the world over Ethicon’s pelvic mesh devices. Federal claims in the United States have been consolidated as multidistrict litigation taking place in the Southern District of West Virginia, and the companies also face Ethicon pelvic mesh lawsuits, including class actions, in the United Kingdom, the Netherlands, Belgium, Israel, Australia, and Canada
  • Multidistrict litigation (MDL) also is taking place over Ethicon’s pelvic mesh devices, with federal personal injury claims making their way through the Northern District of Georgia. New Jersey state cases have been consolidated as multicounty litigation (MCL) in Atlantic County
  • Johnson and Johnson continues to face numerous lawsuits over allegations that its talcum-powder products, including Johnson’s Baby Powder, caused cancer, including ovarian cancer and mesothelioma, in long-time, regular users. In July 2018, a jury found the company liable for several women’s ovarian cancer, ordering Johnson & Johnson to pay $4.7 billion. Multidistrict litigation (MDL) over J&J talc products presently is taking place in New Jersey.

Does this sound like the kind of company that should be giving out cash dividends to its shareholders, or should Johnson & Johnson’s Board of Directors focus more resolving existing claims and developing safer products in the future?

At least the brass at Johnson & Johnson are not coy about showing where their true priorities lie.

Sources:

Johnson & Johnson News Release. (2 January 2019). Johnson & Johnson Announces Quarterly Dividend for First Quarter 2019

Johnson & Johnson Corporation. (20 February 2019). Form 10-K for 12 months ended Dec. 30, 2018. Notes to Financial Statements. Commitments and Contingencies Disclosure. Legal Proceedings. Product Liability. United States Securities and Exchange Commission (SEC)

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Legal Disclaimer: The information in this article is not intended to be used as medical information or diagnosis. The sources of the information presented in the article have been researched and are linked within the article. Please seek out medical advice from a licensed medical professional if you are experiencing a problem with any of the drugs or devices mentioned in this article. 

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