J&J settles US hip implant claims for $120 mn; posts higher Q4 revenues
23 January 2019
Johnson & Johnson and its DePuy Orthopaedics unit have agreed to pay $120 million to resolve deceptive marketing claims by several US states over the company’s metal-on-metal hip implants, even as the company reported stronger fourth quarter revenues.
In a settlement announced on Monday, attorneys general of 46 US states alleged DePuy engaged in unfair and deceptive practices in the promotion of its ASR XL and Pinnacle Ultamet hip implant devices.
DePuy, however, stated the settlement involved no admission of liability or misconduct on the part of the companies.
“DePuy Synthes remains committed to meeting the current and future needs of orthopedic surgeons and patients,” the company said.
The company posted stronger-than-expected fourth quarter earnings Tuesday and forecast a modest increase in full year sales for 2019 to more than $81 billion.
The stronger-than-expected fourth quarter earnings come as the consumer healthcare group looks to overcome steep share price declines following allegations that the company knew for decades that its iconic baby powder sometimes contained asbestos and failed to alert authorities.
Group sales of Johnson & Johnson were pegged at $20.4 billion while full year sales is expected to be about $81.4 billion, with adjusted earnings in the range of $8.50 to $8.65 per share.
Johnson & Johnson said earnings for the three months ended in December stood at $1.97 per share, rising 13.2 per cent from the same period last year.
"Looking ahead, the strength of our broad-based business and disciplined approach to portfolio management positions us to continue to fuel investments in innovation that enable us to capitalize on strategic opportunities and deliver strong performance over the long-term," said CEO Alex Gorsky.
Johnson & Johnson shares plunged the most in more than 15 years in mid-December after it was reported that the company knew both its raw talc and finished powder tested positive for traces of asbestos, a carcinogen, citing documents linked to a court case that saw a jury in Missouri award $4.7 billion to 22 women who said that the products contained asbestos and caused them to develop ovarian cancer.
The Missouri jury award included $550 million in compensatory damages and $4.14 billion in punitive damages, according to a statement from the attorneys representing the plaintiffs. The company faces more than 9,000 cases over body powders containing talc, according to its latest quarterly filing with the Securities and Exchange Commission.
Johnson & Johnson is in the midst of five appeals to similar verdicts linked to its products, even after the US Food & Drug Administration said a study found "no asbestos fibers or structures in any of the samples of cosmetic-grade raw material talc or cosmetic products containing talc."