Johnson & Johnson saw its stocks suffer their biggest drop in 16 years, following a media report that alleged the company concealed for decades that trace amounts of asbestos was in its baby powder.
Shares of the U.S. pharmaceutical and cosmetics group fell 9 percent Friday, wiping out tens of billions of dollars from the company's market capitalization.
Linked to ovarian cancer
The report Friday, by Reuters news service, cited documents released as part of a lawsuit by plaintiffs claiming that Johnson & Johnson's baby powder can be linked to ovarian cancer.
The study found that genes on the X-chromosome get potentially passed down through the father to his daughter, thus increasing the risk of ovarian cancer in girls. Wikimedia Commons
It said that the company's executives knew the baby powder contained trace amounts of asbestos, from as early as 1971, but deliberately chose not to make the information public.
The Reuters report also alleged that Johnson & Johnson tried, unsuccessfully, to stop regulators from lowering the maximum level of asbestos allowed in talc-based cosmetics.
Report is strongly denied
Johnson & Johnson strongly denied the report Friday, calling it "one-sided, false and inflammatory."
Toribio Jimenez lies on his bed in his basement bedroom of the home where he and 10 other people live in Nashville, Tenn, Sept. 3, 2009. Jimenez was given a job removing asbestos in the U.S. through the H2-B nonagricultural guest worker program. The job was not the job that was promised to him through the program, and after being fired, Jimenez said he now has no option but to work illegally so he can pay back the money he borrowed to make the trip to the U.S. VOA
"Simply put, the Reuters story is an absurd conspiracy theory," the company said in a statement. "Johnson & Johnson's baby powder is safe and asbestos-free."
The controversy has long dogged the company, which has been battling more than 10,000 cases claiming its Baby Powder and Shower to Shower products cause ovarian cancer.
Investors worry the lawsuits will cost the company billions of dollars in damages and loss of future sales of Johnson & Johnson products. (VOA)
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