(Reuters) - Johnson & Johnson said on Monday it plans to buy back up to $5 billion of its stock, after a Reuters report on Friday that the company knew for decades that its Baby Powder contained cancer-causing asbestos wiped about $40 billion from its market value.
Shares of the company closed down 3 percent on Monday, extending a 10 percent fall on Friday after the report was published.
They were up about 1 percent in extended trading following the announcement of the share buyback. The repurchase plan has no time limit and may be suspended for periods or discontinued at any time, the company said in a statement.
J&J knew about the presence of small amounts of asbestos in its products as early as 1971, a Reuters examination of company memos, internal reports and other confidential documents showed.
The share repurchase was just the latest effort the healthcare conglomerate has made to boost investor confidence.
In response to the report, the company said on Friday “any suggestion that Johnson & Johnson knew or hid information about the safety of talc is false.”
On Monday, J&J took out a full-page ad in the New York Times titled “Science. Not Sensationalism,” saying it has scientific evidence its talc is safe and beneficial to use. “If we had any reasons to believe our talc was unsafe, it would be off our shelves,” the ad said.
J&J Chief Executive Alex Gorsky, in his first public statement since the Reuters story was published, is scheduled to appear on CNBC at 6 p.m. EST (2300 GMT) on Monday.
“We unequivocally believe that our talc, our baby powder, does not contain asbestos,” Gorsky said in a clip CNBC released ahead of the interview. He also touted the company’s testing practices for determining whether the talc was safe.
While J&J has dominated the talc powder market for more than 100 years, the products contributed less than 0.5 percent of its $76.5 billion revenue last year. The company has large pharmaceutical and medical device portfolios in addition to its consumer products business.
J&J shares were trading at $130.30 in after hours trading following a close at $129.14 on Monday.
Reporting by Ankur Banerjee and Michael Erman in New York and Aakash Jagadeesh Babu in Bengaluru; editing by Nick Zieminski, Jonathan Oatis and Bill Berkrot