Johnson & Johnson (JNJ) is escalating its efforts to resolve the long-running talc lawsuit by agreeing to pay an additional $1.1 billion, the Wall Street Journal reported. This increase would raise the total settlement amount to over $9 billion, to be paid out over 25 years. Interestingly, the company has secured the support of Allen Smith, a prominent plaintiffs’ lawyer representing around 12,000 claimants, who was previously opposed to the deal.
It’s important to highlight that JNJ intends to declare bankruptcy for one of its subsidiaries by the end of September to finalize the settlement. However, the deal remains uncertain, as some lawyers for cancer victims oppose the agreement and intend to challenge J&J’s bankruptcy plan.
J&J’s settlement seeks to resolve claims that its talc products caused cancer. Despite past legal setbacks, the company is hopeful that the increased offer and added support from plaintiffs’ lawyers will secure the 75% claimant approval needed for bankruptcy court approval.
Another $1B Blow to JNJ’s Balance sheet
In a separate legal settlement, Johnson & Johnson has been ordered to pay over $1 billion in damages for violating its agreement with former shareholders of Auris Health Inc., a medical device company it acquired for $3.4 billion in 2019.
The judge accused J&J of breaching the acquisition agreement by prioritizing the development of its existing robot, the Verb, over Auris’ two surgical robots, the iPlatform and the Monarch.
Is JNJ Stock a Buy or Sell?
JNJ stock has gained about 15.5% in the past three months. Currently, analysts are cautiously optimistic about JNJ’s prospects. With six Buy and eight Hold recommendations, Johnson & Johnson has a Moderate Buy consensus rating.
The analysts’ average price target on JNJ stock of $172.46 implies 3.05% upside potential from current levels.
