Johnson & Johnson has asked US officials to intervene after an activist investor tried to halt sales of the company’s talc-based baby powder overseas. Separately, the New Jersey-based drugmaker clashed with Reuters over a story about the “Texas two-step” strategy it employed to pawn talc liabilities on a new company at the end of last year.
First, the shareholder is concerned: the platform of activist investors Tulipshare wants to take advantage of a vote for Stop J&J to sell its talcum powder worldwide. J&J currently faces nearly 40,000 lawsuits related to talc safety concerns, which hinge on the product’s potential to cause cancer.
Not content to play duck sitting, J&J has asked the U.S. Securities and Exchange Commission (SEC) to exclude Tulipshare’s proposal from an upcoming proxy filing.
Tulipshare is an investment platform that allows people to pool shares with the aim of promoting change in business.
âWe want Johnson & Johnson to stop the sale of its talc powder globally,â Tulisphare says on its talc campaign page. “Amazingly, Johnson & Johnson continues to say its product is ‘safe’ even though long-term use of talcum powder has been linked to several cancers, including ovarian cancer and mesothelioma,” the company continues. investor platform.
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Johnson & Johnson, for its part, maintains that its talc products are safe. “We support the safety of Johnson’s Baby Powder, which is safe, contains no asbestos and does not cause cancer,” a company spokesperson told Fierce Pharma.
In a letter to the SEC, J&J attorneys asked officials not to require the company to put the issue to a vote at its annual meeting. The proposal would burden J&J’s litigation strategy and “impinge upon management‘s exercise of day-to-day business judgment with respect to ongoing litigation in the ordinary course of business,” J&J’s attorneys wrote.
In October, J&J formed LTL Management to absorb liabilities related to its talc litigation. He leveraged a strategy known as “Texas Two-Step,” under which the subsidiary immediately filed for bankruptcy.
The aim was to stop litigation and move the cases to bankruptcy court, where plaintiffs would compete for compensation from a limited pool of money, Reuters reported late last week.
Prior to LTL’s bankruptcy filing, J&J was facing about $3.5 billion in talc verdict and settlement costs, Reuters noted. Now, J&J plans to give its subsidiary $2 billion to place in a trust to compensate the 38,000 current plaintiffs, as well as future plaintiffs, according to the publication.
J&J began evaluating the maneuver as early as April, Reuters pointed out. He created a secret “Project Plato” to evaluate the strategy, reports the press service.
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Late Thursday, attorneys for J&J and LTL filed for a temporary restraining order for to block the publication of the Reuters article on the Plato project, according to the outlet. The attorney accused the plaintiffs’ lawyers of sharing confidential information with Reuters for the purpose of trying the case in the press. A Reuters spokesman said J&J’s claims were baseless.
J&J stopped selling its talc powders in the United States and Canada in May 2020. At the time, the company attributed the delay in demand to “changes in consumer habits fueled by safety misinformation of the product and a constant barrage of litigation advertisements”.
J&J has remained loyal to the defense of its baby powder products.
“We stand behind the ingredients we use in our products, and Johnson & Johnson has implemented a rigorous testing standard to ensure the safety of our cosmetic talc,” a company spokesperson said. Recount The Guardian. “Not only is our talc regularly tested to ensure it does not contain asbestos, but our talc has also been tested and confirmed to be asbestos-free by a range of independent laboratories, universities and health authorities. world.”