Johnson & Johnson to buy back $5B in stock after asbestos report

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Johnson & Johnson slammed by report that claims it knew of asbestos in baby powder

A report by the Reuters news service claims Johnson & Johnson knew for decades about the existence of trace amounts of asbestos in its baby powder. The news has sent company shares into a tailspin, suffering their worst sell-off in 16 years.

Johnson & Johnson said its board plans to repurchase up to $5 billion of its common stock after it was pummeled on Friday, following the release of a scathing Reuters report, which alleged the company knew about -- and hid -- the presence of cancer-causing asbestos in its iconic baby powder.

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In response, J&J slammed the piece as “one-sided, false and inflammatory” in a statement published on its website. On Monday, CEO Alex Gorsky continued to defend the product, citing tens of thousands of studies that he said prove talc does not cause cancer, or other asbestos-related diseases.

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J&J suffered a nearly $40 billion loss in value on Friday after its shares fell more than 10 percent.

JNJJOHNSON & JOHNSON130.31-1.76-1.33%

"Based on our continued strong performance and, more importantly, the confidence we have in our business going forward, the Board of Directors and management team believe that the company's shares are an attractive investment opportunity," Gorsky said in a statement.  The report alleged that J&J didn’t tell the Food and Drug Administration about at least three tests by three different labs from 1972 to 1975 that found asbestos in its talcum powder, in one case at levels reported as “rather high,” according to internal documents from the company.

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