Updated at 10:07 am EST
Johnson & Johnson (JNJ) shares edged lower Friday after the consumer healthcare group said it would completely halt the sale of its iconic talc-based baby powder products next year.
Johnson & Johnson, which faces around 38,000 lawsuits centered around links to cancer-causing asbestos found in the talc-based product , stopped selling Baby Powder in the U.S. and Canada in 2020. The group, which began selling talc-based Baby Powder in 1894, said late Thursday that it will transition to “an all cornstarch-based baby powder portfolio” starting in 2023.
Late last year, Johnson & Johnson noted that costs linked to defending cases linked to allegations that its Baby Powder, and other talc-based products, contained cancer-causing asbestos are close to $1 billion. Another $3.5 billion has been tied to previous verdicts and settlements.
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The group then spun-off a specially-created subsidiary, LTL Management LLC, to house all of its talc-related litigation liabilities that immediately filed for bankruptcy protection in North Carolina, with the case ultimately transferred to a court in New Jersey.
Johnson & Johnson shares were marked 1% lower in early Friday trading to change hands at $165.56 each.
Last month, Johnson & Johnson posted better-than-expected second quarter earnings but trimmed its full year sales and profit forecasts owing to the impact of a stronger U.S. dollar.
Pharmaceuticals sales were up 6.7% to $13.332 billion while Covid vaccine sales, Johnson & Johnson said, more than doubled from last year to $544 million.
Looking into the 2022 financial year, Johnson & Johnson trimmed its forecast for adjusted earnings to between $10.00 to $10.10 per share, down from its prior forecast of $10.15 to $10.35 per share, with sales in the region of $93.3 to $94.3 billion.
That’s down from its previous estimate of $94.8 billion to $95.8 billion, although that tally included vaccine sales.