Days after a scathing Reuters report accusing consumer health care giant Johnson & Johnson of a decades-long cover-up of evidence that its talcum powder products contained cancer-causing asbestos, the company’s market value plummeted more than $50 billion. In response, J&J announced it plans to repurchase $5 billion shares.
“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,” CEO Alex Gorsky said in a statement. The company also published a video on its website and social media of Grosky reassuring consumers that its Johnson’s Baby Powder is safe, a mantra the company has continued to repeat through the decades.
Johnson & Johnson faces more than 11,000 lawsuits alleging its talc-containing products cause cancer, including ovarian cancer and mesothelioma, a rare but deadly form of cancer that develops in the lining of the lungs, abdomen and chest.
Asbestos is a mineral that is mined from the earth much like talc. For decades, asbestos was used in construction, shipbuilding and friction materials due to its strength and fire resistance.
When asbestos was linked to serious illnesses including the chronic lung disease asbestosis, lung cancer and mesothelioma, its use was dramatically scaled back in the United States. The use, sale, mining, importing and exporting of asbestos is banned in more than 60 other countries.
In July, a St. Louis, Missouri jury awarded 22 women $4.69 billion after finding that J&J’s talcum powders contained asbestos and contributed to the women’s ovarian cancer diagnoses.
Johnson & Johnson said the repurchases of its shares may be made at any time and are done at the discretion of management.