Johnson & Johnson Bankruptcy Talk: Q2 Earnings Soar, But Litigation Looms On Horizon

Key takeaways

• Johnson & Johnson has been ordered to pay nearly $19 million in damages by a California to a mesothelioma victim
• The company has proposed a $8.9 billion settlement to end tens of thousands of cases and stop new ones from coming through
• The stock declined at the news, but gained 6% at the upbeat Q2 earnings report

Big Pharma stalwart Johnson & Johnson suffered a blow to its talc litigation defense when a California court determined the company must pay a 24-year-old man nearly $19 million in damages. The victim had developed cancer from a Johnson & Johnson baby talcum powder, with Johnson & Johnson looking to settle thousands more through the U.S. bankruptcy court.

It was a downbeat moment for the company’s share price but soon revived with a stellar earnings report for the second quarter two days later. The looming shadow of further litigation might be enough for investors to get cold feet in the long term. Let’s get into the details.