Several Johnson & Johnson JNJ executives, mine managers, scientists, doctors and lawyers were aware that small amounts of asbestos were found in its baby powder -- a claim Johnson & Johnson CEO Alex Gorsky told CNBC's Jim Cramer is not true.
What Happened
Johnson & Johnson's stock was hard hit over the past two trading sessions after a Reuters report said the company knew since the 1970s its baby powder was contaminated with asbestos. Speaking to Cramer Monday evening, Gorsky said "we unequivocally believe" the company's baby powder doesn't asbestos and this claim is backed by "thousands of studies."
One of the studies conducted by Harvard Medical school tested 100,000 male and female patients who used Johnson & Johnson's talc-based baby powder. The executive said the study found "no causation between talc, baby powder and ovarian cancer or any type of asbestos-related disease."
Why It's Important
Studies that contradict Gorsky's comments are "either incomplete, or frankly, they're refutable based upon the methodology or the particular sample that they used," he said. After all, he said, the company has a well known reputation of taking an entire product off the shelf that's believed to be "harmful to stay on the market."
More notably, Gorksy said Johnson & Johnson is in the business of "trying to cure cancer" and the company always has "empathy and sympathy" for patients that are diagnosed with the disease.
What's Next
Gorsky's appearance on "Mad Money" appears to have partially eased investor concerns. The company also announced a new share authorization purchase of up to $5 billion of its own company's stock.
"Our strong cash flow enables us to simultaneously return value to shareholders through our regular quarterly dividend and share repurchases, while at the same time continuing to deploy capital that will further strengthen our robust enterprise pipeline and drive long-term growth," Gorsky said in a press release.
The stock traded up marginally Tuesday morning to $129.84 per share.
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Johnson & Johnson's Asbestos Woes: Experts Speak Up
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Photo credit: Mike Mozart, Flickr
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