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Talcum Powder-Cancer Lawsuit

FILE - In this April 15, 2011, file photo, a bottle of Johnson's baby powder is displayed. On Monday, Aug. 21, 2017, a Los Angeles County Superior Court spokeswoman confirmed that a jury has ordered Johnson & Johnson to pay $417 million in a case to a woman who claimed in a lawsuit that the talc in the company's iconic baby powder causes ovarian cancer when applied regularly for feminine hygiene. (AP Photo/Jeff Chiu, File)

Johnson & Johnson said on Friday it is recalling about 33,000 bottles of baby powder in the United States after U.S. health regulators found trace amounts of asbestos in samples taken from a bottle purchased online.

The move marks the first time the company has recalled its baby powder for possible asbestos contamination, and the first time U.S. regulators have announced a finding of asbestos in a Johnson & Johnson powder. Asbestos is a known carcinogen that has been linked to mesothelioma.

The voluntary recall is limited to one lot of Johnson’s Baby Powder produced and shipped in the United States in 2018, the company said. Johnson & Johnson in a news release said that testing by the U.S. Food and Drug Administration as recently as a month ago found no asbestos in their talc.

Johnson & Johnson shares were down 4.6% on Friday.

The U.S. health care conglomerate is facing some 15,000 lawsuits from plaintiffs claiming use of Johnson & Johnson talc products caused cancer.

Johnson & Johnson said on a conference call that it received a report from the FDA on Oct. 17 alerting the company about the asbestos finding. It said it has started an investigation and is reviewing manufacturing records to determine where the product was shipped.

Johnson & Johnson added that it is working with the FDA to determine the integrity of the tested sample as well as the validity of test results.

The FDA was not immediately available to comment.

Since 2003, talc in Johnson’s Baby Powder sold in the United States has come from China through supplier Imerys Talc America, a unit of Paris-based Imerys SA and a co-defendant in much of the talc litigation. Imerys and Johnson & Johnson said the Chinese talc is safe.

Reuters on Dec. 14 published a special report detailing that the company knew for decades that trace amounts of asbestos could be found in its talc. Johnson & Johnson has repeatedly said that its talc products are safe, and that decades of studies have shown them to be asbestos-free and that they do not cause cancer.

The FDA test indicated the presence of no greater than 0.00002% of chrysotile asbestos in the tested sample, Johnson & Johnson said.

The World Health Organization and other authorities recognize no safe level of exposure to asbestos. While most people exposed never develop cancer, for some, even small amounts of asbestos are enough to trigger the disease years later.

Wells Fargo analyst Larry Biegelsen said in a note to clients that the recall could encourage additional lawsuits and prompt the company to pursue a broader settlement.

Biegelsen estimates a settlement could cost the company $2 billion to $6 billion, assuming 20,000 cases outstanding and a settlement amount of $100,000 to $300,000 per person.

Johnson & Johnson declined to comment on Biegelsen’s projections.

Jefferies health care equities strategist Jared Holz said Johnson & Johnson has already lost close to $10 billion in market value due to the talc issue over the past year.

The company’s consumer unit said it was too early to confirm whether cross-contamination of the sample had caused a false positive, whether the sample was taken from a bottle with an intact seal or whether the sample was prepared in a controlled environment. It added that it could not confirm whether the tested product was authentic or counterfeit.

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