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J&J drops 4% on report DOJ investigating allegations company lied about talc cancer risks

Key Points
  • The Justice Department is pursuing a criminal probe into whether Johnson & Johnson lied about the possible cancer risks of its talcum powder, according to a Bloomberg report.
  • J&J has denied allegations that its talc causes cancer. It said numerous studies and tests by regulators worldwide have shown that its talc is safe and asbestos-free.

Bottles of Johnson & Johnson baby powder line a drugstore shelf in New York.
Lucas Jackson | Reuters

The Justice Department is pursuing a criminal probe into whether Johnson & Johnson lied about the possible cancer risks of its talcum powder, according to a Bloomberg report Friday.

A grand jury in Washington is examining documents related to what J&J knew about any carcinogens in their products, according to Bloomberg, citing people with knowledge of the matter.

In response to the report, J&J told CNBC that the implication that there has been a new development in the matter is flatly wrong. J&J disclosed in February that it had received subpoenas. "We are fully cooperating with the DOJ investigation," a J&J spokesperson said.

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Shares of J&J were down more than 4% in early afternoon trading.

The consumer products company, which makes everything from Tylenol to Aveeno lotions, faces more than 13,000 talc-related lawsuits. J&J has denied allegations that its talc causes cancer. It said numerous studies and tests by regulators worldwide have shown that its talc is safe and asbestos-free.

J&J and the Justice Department were not immediately available for comment.

Last month, a California jury ruled in favor of a plaintiff who blamed her cancer on talcum-based baby powder products made by J&J and Colgate-Palmolive. That came just two weeks after the company was ordered to pay $300 million in punitive damages to a woman in New York who blamed her cancer on the company's talc products.

J&J relaunched its iconic namesake baby product line last summer to reverse a decline in the company's baby care unit. While trusted for decades, the 124-year-old brand had fallen out of touch with consumers, namely millennial moms, who have been increasingly opting for upstart brands with a trendier, more natural image.

This is breaking news. Please check back for updates.

source: CNBC

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