Science Favors J&J in Talcum Powder Lawsuits

If I ran a hedge fund — now there’s a thought! — I would be loading up right now on shares of Johnson & Johnson. After rising nearly 25 percent from the end of May until Dec. 13, the stock suddenly plummeted, giving back almost all of the gains in five trading days. As 2018 comes to a close, it’s down 9 percent for the year.

The stock’s abrupt drop was due to a Reuters story, published on Dec. 14, that alleged that the company was aware that its best-known product, its talcum powder, contained “small amounts of asbestos,” and had kept that knowledge a secret. For years, Johnson & Johnson has fought lawsuits claiming that its talcum powder caused ovarian cancer. But before the asbestos revelation, the company had handled them in stride, in large part because the scientific evidence was weak. Crucially, large-scale epidemiological studies failed to show that women who used talcum powder had a higher incidence of ovarian cancer than women who didn’t. Of the 40 or so cases that have been decided so far, Johnson & Johnson says it had emerged victorious in 35 of them, either because the cases were thrown out, the company won at trial, or a trial loss was overturned on appeal. (It has also settled one case.)