NEW YORK • Johnson & Johnson (J&J) on Monday scrambled to contain fallout from a Reuters report that the healthcare conglomerate knew for decades that cancer-causing asbestos lurked in its baby powder, taking out full-page newspaper ads defending its product and practices, and readying its chief executive for his first television interview since investors erased tens of billions of dollars from the company's market value.
J&J shares fell nearly 3 per cent on Monday, closing at US$129.14 in New York Stock Exchange trading. That drop was on top of the 10 per cent plunge that wiped out about US$40 billion (S$54.8 billion) of the company's market capitalisation following the Reuters report last Friday. J&J also announced on Monday that it would be repurchasing up to US$5 billion of its common stock.
Senator Edward Markey, a Massachusetts Democrat on the Environment and Public Works Committee, last Friday sent a letter to the head of the US Food and Drug Administration (FDA), calling on the agency to investigate the findings in the Reuters report to determine whether J&J misled regulators and whether its baby powder products threaten public health and safety.
J&J chief executive Alex Gorsky, in his first interview since the Reuters article was published, was scheduled to appear on CNBC's Mad Money on Monday night.
J&J knew for decades about the presence of small amounts of asbestos in its products dating back to as early as 1971, a Reuters examination of company memos, internal reports and other confidential documents showed.
In response to the report, J&J said last Friday that "any suggestion that Johnson & Johnson knew or hid information about the safety of talc is false".
A Monday full-page ad from J&J - headlined "Science. Not sensationalism" - ran in newspapers including The New York Times and The Wall Street Journal. The ad asserted that J&J has scientific evidence its talc is safe and beneficial to use. "If we had any reasons to believe our talc was unsafe, it would be off our shelves," the ad said.
J&J rebutted Reuters' report in a lengthy written critique of the article and a video from Mr Gorsky.
In the written critique, posted on the company's website, J&J said Reuters omitted information it supplied to the news organisation that demonstrated the healthcare conglomerate's baby powder is safe and does not cause cancer; that J&J's baby powder has repeatedly been tested and found to be asbestos-free; and that the company has cooperated with the US FDA and other regulators around the world to provide information requested over decades.
"Since tests for asbestos in talc were first developed, J&J's Baby Powder has never contained asbestos," Mr Gorsky said in the video. He said regulators "have always found our talc to be asbestos-free".
A Reuters spokesman on Monday said the agency "stands by its reporting".
Reuters' investigation found that while most tests in past decades found no asbestos in J&J talc and talc products, tests on baby powder conducted by scientists at Mount Sinai Medical Centre in 1971 and Rutgers University in 1991, as well as by labs for plaintiffs in cancer lawsuits, found small amounts of asbestos.
Other tests by J&J's own contract labs and others periodically found small amounts of asbestos in talc from mines that supplied the mineral for baby powder and other cosmetic products into early 2000s.
The company did not report to the FDA three tests by three different labs from 1972 to 1975 that found asbestos in its talc.
The Reuters story drew no conclusions about whether talc itself causes ovarian cancer. Asbestos, however, is a carcinogen.
The World Health Organisation's International Agency for Research on Cancer has listed asbestos-contaminated talc as a carcinogen since 1987.