A new £1 billion lawsuit in the UK against Johnson & Johnson for talc-related cancer claims highlights the persistent legal risks facing the healthcare behemoth. As investors weigh recent strong financial results against escalating litigation costs and the strategic spin-off of Kenvue, understanding the nuances of these global legal challenges is critical for informed long-term portfolio decisions.
The global legal challenges facing Johnson & Johnson (J&J) have intensified with the filing of the first major lawsuits in Britain alleging that its talc-based baby powder causes cancer. This development mirrors tens of thousands of similar claims the pharmaceutical giant is already battling in the United States, expanding the financial and reputational risks investors must consider.
Filed in London’s High Court, the lawsuit names both J&J and its former consumer health arm, Kenvue UK Limited. The law firm KP Law is representing more than 3,000 individuals who contend that years of using J&J’s baby powder led to severe illnesses, including ovarian cancer and mesothelioma, between 1965 and 2023, as reported by Reuters. This collective action is valued at approximately £1 billion ($1.34 billion), signaling a significant new front in the company’s ongoing legal saga.
The Allegations: Decades of Concealment?
The core of the UK lawsuit, much like its US counterparts, revolves around allegations that J&J’s talc products contained carcinogenic fibers, specifically asbestos. Claimants assert that J&J was aware of these dangers as early as the 1960s but deliberately concealed the risks from consumers. Internal documents cited in the lawsuit allegedly reveal that the company identified asbestos in its baby powder and even discussed patenting a method to remove asbestos fibers from talc in 1973, yet chose to prioritize sales over warnings.
Witness testimonials underscore the human cost of these allegations. Janet Fuschillo, a 75-year-old claimant diagnosed with ovarian cancer, shared that she used J&J’s baby powder since the 1960s, believing it to be “pure” and “good for you.” Another claimant, Patricia Angell, recounts her husband Edward’s death from mesothelioma, with asbestos strains linked to contaminated talc found in his autopsy report. Mesothelioma is a rare but deadly cancer almost always caused by asbestos exposure, according to the NHS.
J&J has consistently and vehemently denied these claims, asserting that its products are safe, asbestos-free, and do not cause cancer. Kenvue, which assumed responsibility for talc-related litigation outside the U.S. and Canada after its spin-off in 2023, echoed this stance, stating that extensive testing by independent laboratories, universities, and health authorities worldwide backs the safety of Johnson’s baby powder.
US Litigation: A Precedent for Billions
The UK lawsuits emerge against a backdrop of extensive and costly litigation for J&J in the United States. The company is currently facing tens of thousands of similar lawsuits, many of which have resulted in substantial verdicts against it. Last week, a Los Angeles jury ordered J&J to pay $966 million to the family of Mae Moore, who died of mesothelioma in 2021. This award included $16 million in compensatory damages and a staggering $950 million in punitive damages. J&J has vowed to appeal the verdict, labeling it “egregious and unconstitutional.”
The company has also made multiple attempts to resolve its talc liabilities through bankruptcy filings, most notably a $10 billion plan tied to its subsidiary, Red River Talc. However, federal courts have rejected these strategies three times, forcing J&J to continue fighting cases individually or seek alternative settlement avenues. For a comprehensive overview of J&J’s protracted legal battles and their financial ramifications, investors can refer to detailed timelines published by financial news outlets like Bloomberg.
Key Differences Between UK and US Legal Landscapes
While the claims are similar, the UK legal system presents distinct differences that could influence the outcome and scale of damages compared to the US:
- Judge vs. Jury: Unlike the US, where juries often decide civil cases, the UK lawsuits will be determined by a judge. This may lead to a more technical, rather than emotionally driven, assessment of evidence.
- Punitive Damages: Punitive awards in England are typically far smaller than those seen in the US. While UK courts can award “exemplary damages” in cases of willful wrongdoing, the sums are generally a fraction of the multi-million or billion-dollar punitive verdicts common in American courts.
These differences are significant for investors, as they could cap the potential financial outlay for J&J, even if the company is found liable in the UK.
Investment Implications and Analyst Perspectives
The ongoing talc litigation saga continues to be a major overhang on J&J’s stock, introducing considerable uncertainty for long-term investors. Despite the legal headwinds, J&J has demonstrated strong financial performance, with analysts raising price targets following robust Q3 results and the planned orthopedic spin-off. Brokerages like Argus, Citi, and TD Cowen maintained ‘buy’ ratings, while Raymond James kept an ‘outperform,’ citing strong quarterly performance and growth prospects.
However, the market sentiment remains mixed. On Stocktwits, retail sentiment for J&J was reported as ‘bullish’ amid a 61% decline in 24-hour message volume. Yet, some users predicted further weakness in J&J’s shares, with expectations of a retreat toward the $185 level during a market sell-off. While J&J’s stock has risen 35% year-to-date in 2025, the shadow of litigation and potential future liabilities means investors must exercise caution and conduct thorough due diligence.
Kenvue’s Role After the Spin-Off
A crucial element in J&J’s strategy to manage its talc liabilities was the 2023 spin-off of its consumer health unit into a new company, Kenvue. J&J has stated that Kenvue “retained the responsibility and any purported liability for talc-related litigation outside of the United States and Canada.” This strategic move aimed to create a clearer separation of liabilities, but Kenvue itself now directly faces these claims, as seen with its inclusion in the UK lawsuit.
For investors, this means understanding the financial health and legal exposure of both J&J and Kenvue. While J&J no longer sells talc-based baby powder in the US (since 2020) and globally (since 2023), the historical claims against decades of sales will continue to unfold, with Kenvue at the forefront of non-US and Canadian litigation. The outcome of the UK lawsuit will be a significant test case for Kenvue’s legal strategy and its financial resilience.
The Path Forward for Investors
For those invested in or considering Johnson & Johnson, the expanding talc litigation represents a long-term risk factor that cannot be overlooked. While the company’s core pharmaceutical and medical device businesses remain strong, and analysts are optimistic about growth drivers like the orthopedic spin-off, the potential for multi-billion-dollar payouts and ongoing legal expenses will continue to impact profitability and investor confidence.
Key areas for investors to monitor include:
- The progress and outcomes of the UK lawsuit, particularly the judge’s findings and any awarded damages.
- J&J’s ongoing efforts to resolve US talc litigation, including any new settlement proposals or appeals.
- Kenvue’s financial statements and legal provisions related to talc claims outside the US and Canada.
- Any shifts in analyst ratings or long-term price targets that specifically account for updated litigation risks.
This situation demands a nuanced perspective. While J&J is a diversified healthcare giant, its legacy product challenges continue to necessitate close attention from the astute long-term investor. The legal landscape is complex and evolving, making continuous analysis crucial for navigating the potential impacts on portfolio performance.
