The Johnson & Johnson Talc Crisis lasts for years. On Friday, the company lost $ 40 billion in fund value when Reuters announced that the American giant personal care products knew for decades that its baby powder was contaminated with asbestos.
The company says that the story is "an absurd conspiracy theory" because "J & J's regulators and independent experts have used all available methods to check whether J & J is asbestos and all of these methods have revealed that our talcum powder Cosmetic does not inside asbestos. "
If we look back and look at similar situations, the market may have been too responsive, but complaints and trademark damages are not easily degradable.
J & J has to face thousands of claims by the user who claim that the talc powder caused health problems. In July, the Missouri Jury ordered the company to pay $ 4.7 billion for 22 women who claimed ovarian cancer causing asbestos J & J products.
The market had paid little attention to this decision. Last Thursday, the company's spare had grown by nearly 5 percent since January, with a market value of almost $ 400 billion.
A ten percent convulsive value can be exaggerated. Panic usually spreads among investors when it seems probable that billions of dollars will be reached outside the court.
Merck Pharmaceuticals Merck lost 27 billion dollars, 27 percent of its market value when it relied on abdominal pain Vioxx in 2004 when studies related to heart attacks and strokes. The company ended up solving most of the under $ 5000 million.
Likewise, according to Bank of America Merrill Lynch, investors have reflected in the stock market the possibility that Bayer will have to pay $ 15,000 million in legal proceedings stating that Monsanto, a US-acquired herbicide contracted by the American company this year, believes the payments are likely to be less than 5 billion dollars.
Costs will not come in the short term. Merck continued to handle Vioxx trials more than ten years after the withdrawal of the drug.
But J & J's reputation can be the toughest solution. In the 1980s, seven people died after taking Tylenol analgesics to which cyanide had been added. The company's response to this tragedy – it unleashed 31 million jars, advertised ads to warn customers and introduced counterfeit packaging – became the foundation of basic education for faculties, how to improve reputation.
If it is true that the company did not make any worrying information about the baby product used throughout the world, the case could also be used at universities, but as an example of what is not to be done.