Johnson & Johnson Hit With an $8 Billion Fine: Has the Stock Become Too Much of a Risk?
Johnson & Johnson (NYSE: JNJ) has come under fire this year, facing some big fines. After being saddled with a $572 million fine related to opioids a few months ago, the pharmaceutical company is now facing a newer, larger fine. Earlier this month, jurors awarded a man in Philadelphia $8 billion in punitive damages, which will leave a big dent on its financials. That fine was in addition to the $680,000 he had already won because Johnson & Johnson failed to warn young men that they could grow breasts if they used its drug Risperdal.
While the fine will likely be reduced once the company appeals, this could be another sign for investors that Johnson & Johnson may be too big a risk to own today. With more than $15 billion on its books the company can absorb these penalties, but they aren't an expense that investors want to see.
The danger for Johnson & Johnson investors is that if more cases come to light, they could lead to even larger fines for the company. These cases could set precedents and result in other states and other victims looking for big settlements. Opioids, in particular, have been a hot topic in the U.S. for years. In 2017, more than 47,000 people died as a result of opioid-related overdoses. And as these numbers continue to rise and more people are affected, a company like Johnson & Johnson that's already been the center of one high-profile case could soon see more people go after it.
Source Fool.com
