More trouble for the healthcare giant. During the teleconference this morning to discuss earnings, a Johnson & Johnson exec disclosed that the US Attorney's Office in Philadelphia sent a grand jury subpoena about the vast and ongoing recall of millions of bottles of over-the-counter pediatric medicines by J&J's McNeil Consumer Healthcare unit. For the record, a spokeswoman for the US Attorney declined to confirm or deny a subpoena was sent, which is standard practice.
The disclosure is just the latest in a troubling swirl of events surrounding the recalls, which have caused a big hit to J&J's venerable corporate image; an indefinite shutdown of a plant where McNeil execs are themselves located; hundreds of millions of dollars in lost sales; a Congressional investigation (see this), and the loss of 300 out of 400 jobs at the plant (back story).
Meanwhile, the ongoing mess caused J&J execs to lower their profit forecast for the year, which is causing a loss of investor confidence. The recalls hurt quarterly sales by $200 million and the plant closing will likely drain 2010 sales by $600 million, cfo Dominic Caruso told investors on a conference call this morning. In response, some Wall Street analysts, such as Standard & Poor's Marc Eiger downgraded J&J stock. One pressing issue - who, if anyone, will be held accountable? (read this).
3 Comments
We hear a lot about all the issues around the J&J pediatric product contamination. Unless I've missed it somewhere -- the exception to what we hear is in regard to gathering information from parents -- e.g. a repository for parents where they can inquire and report illnesses subsequent to the use of any one or combination of these products. We sorely need helpful guidance for parents whose children may have suffered unacknowledged yet related adverse events. Is the FDA making any extra effort specific to this?
Weldon will need to bring back Roy Cohn fromm the dead to survive this one.
Good one, Pharmavet! I know it's cliche, but I truly was "lol"!