(MENAFN- The Peninsula)
Washington Post
Johnson & Johnson has boosted to more than $8.2 billion its offer to settle thousands of lawsuits by people who say its baby powder gave them cancer, according to people familiar with the matter.
The offer, an increase from the drugmaker's previous $6.5 billion bid, signals that J&J may have to pay at least $1.7 billion more to resolve all of the claims in the yearslong litigation. Under the new terms, claimants could get bigger payouts and about $650 million in legal fees covered, said the people, who asked not to be identified discussing the deliberations. J&J declined to comment.
The settlement talks are continuing. J&J maintains its now-withdrawn talc-based powders never caused cancer and it appropriately marketed its baby powder for more than 100 years.
J&J recently garnered support from more than 75% of baby powder claimants for an out-of-court deal that includes claims that the talc-based version caused ovarian and other gynecological cancers. Getting even more people to sign on to the settlement could help the company more quickly use the bankruptcy courts to confine liability to a unit it set up to resolve the suits.
The company could file its latest Chapter 11 case in the coming days, even as a group of alleged victims has still thus far refused to the terms.
J&J shares slipped less than 1% in early Friday trading. The stock has rallied about 5% so far this year, including more than 13% since a low hit in late May.
Earlier this month, the company said it had reached an agreement with a key plaintiff's group that should help move its settlement forward quickly. That deal came after negotiations with Allen Smith, a Mississippi lawyer who tried the first case alleging the company's talc-based baby powder caused ovarian cancer in 2009, and opposed J&J's settlement proposals for years.
Company Paying
Separately, the company has said it's resolved 95% of claims its baby powder was tainted with asbestos and caused mesothelioma, a type of cancer that forms in tissues around the heart and lungs.
Guggenheim analyst Vamil Divan said in a recent note to investors that an additional $1.1 billion would be "within the range of what we believe investors would be comfortable with the company paying.” A possible increase of $1.1 billion from the $6.5 billion bid had been previously reported.
"We believe the positive headlines pointing towards this getting resolved have likely played a role in the move we have seen” in the company's stock in the past few months, he wrote. J&J shares have increased by more than 13% in the past three months.
J&J's decision to sweeten its settlement offer would bring the total the firm has agreed to pay out - or already expended - to resolve baby powder cases to more than $13.4 billion. Most of the cases are gathered before US District Judge Michael Shipp in Trenton for pre-trial information exchanges.
MENAFN20092024000063011010ID1108697258
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.