Benzinga - by Vandana Singh, Benzinga Editor.
Wednesday, Johnson & Johnson (NYSE:JNJ) announced its intention to proceed with a $6.475 billion settlement to resolve numerous lawsuits related to ovarian cancer arising from cosmetic talc litigation.
The Plan provides for a three-month solicitation period during which ovarian claimants are informed of its terms and will have the opportunity to vote – an opportunity denied in prior bankruptcy cases.
If 75% of claimants vote in favor of the Plan, a Company subsidiary may file a consensual “prepackaged” Chapter 11 bankruptcy to secure its confirmation.
In January, Johnson & Johnson announced a tentative settlement to address investigations by 42 U.S. states and Washington, D.C., regarding alleged misleading information about the safety of its talc products linked to cancer cases. The pharmaceutical giant is set to pay approximately $700 million.
The proposed settlement aims to address the majority of talc-related litigation regarding ovarian cancer against the company, constituting about 99.75% of the lawsuits filed against it.
The remaining pending personal injury lawsuits relate to mesothelioma and will be addressed outside of the Plan. The company has already resolved 95% of mesothelioma lawsuits filed to date.
The proposed settlement extends J&J’s efforts to address talc-related claims, augmenting previous settlements concerning mesothelioma and allegations by U.S. states regarding inadequate consumer warnings.
J&J has allocated a reserve totaling $11 billion to accommodate talc-related settlements.
Johnson & Johnson recorded an incremental charge of approximately $2.7 billion in the first quarter of 2024, for a total reserve of approximately $11.0 billion (or $13.7 billion nominal payable over 25 years).
Despite ongoing legal challenges, including recent verdicts favoring plaintiffs, J&J remains resolute in its defense, citing favorable outcomes in the majority of ovarian cancer cases tried thus far.
In January, U.S. District Judge Michael Shipp ruled that Johnson & Johnson has an opportunity to challenge the scientific evidence linking talc to ovarian cancer.
Under Shipp’s order, Johnson & Johnson has until July 23 to present renewed arguments regarding the scientific evidence.
Price Action: JNJ shares are up 4.47% at $151.06 at the last check Wednesday.
Photo via Wikimedia Commons
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