Johnson & Johnson (JNJ, Financial)
Johnson & Johnson has been struggling for most of the year due to lawsuits related to their role in the opioid crisis and talcum powder products. In August, a judge in Oklahoma ruled that Johnson & Johnson was responsible for paying for one year of Oklahoma’s costs related to opioid addiction. This came out to $572 million, and although it may seem like a lot, it was viewed as a win for them as it came well short of the 20 years of costs, or $17 billion, that Oklahoma was seeking. The talcum powder lawsuits all allege that Johnson & Johnson’s talcum powder causes ovarian cancer and mesothelioma in women using it for personal hygiene. Johnson & Johnson has maintained that their products do not contain asbestos and that talc is not a known carcinogen. Talc has over 30 years of medical studies showing it is safe for human use. While the negative headlines in the short term are likely to continue to weigh on Johnson & Johnson, their strong pipeline and fundamentals should be enough to carry them through. They currently have over 30 drugs in phase three trials.
From Jeff Auxier (Trades, Portfolio)'s third-quarter 2019 commentary.
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