J&J: Talk of Mesh Litigation Absent from 2 Q Report

Jane Akre
July 15, 2015
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Notably absent from the Johnson & Johnson Second Quarter report is any discussion of pelvic mesh litigation, its cost and its specific toll on the company.

Speaking to a group of investors Tuesday, CEO Alex Gorsky did not mention pelvic mesh, transvaginal, urology, gynecology, or of the 35,000 or so product liability cases the company is facing.

"First, our commitment to ensuring our products meet the highest quality standards is of course non-negotiable."~Alex Gorsky, CEO J&J

What was notable is that "customer sales were 17.8 billion in the second quarter of 2015 down 8.8 percent when compared to last year. U.S. sales were down 2.4%. Medical device sales of 6.4 billion were down 4.7%, with US sales down 5.8%," according to the 8-K report filed with the SEC. The medical device division of J&J is one of its strongest.

A Q and A session with investors was a soft sell to an appreciative audience with no mention of any litigation including, DePuy metal hips, Risperdal or tainted Tylenol. The company did say its Fort Washington, Pa. plant, closed by the FDA five years ago because of debris floating in children's Tylenol, just passed a recent FDA inspection. There is no timetable on its opening.

Alex Gorsky, Nov. 2011

Alex Gorsky, Nov. 2011

According to Alex Gorsky:

"Now, just to summarize, Johnson & Johnson is a company that’s built a remarkable legacy and has a very exciting future. Healthcare though remains one of every society’s greatest challenges and nothing affects people more personally or affects communities and nations more directly. Our business is strong and you can see that we are continuing to make considerable investments in innovation and have a robust pipeline of truly transformative products to ultimately benefit patients and that we are taking actions to strengthen our leadership positions in areas in which we compete."

Legal Proceedings

Investors could gain great insight about the ongoing litigation from a 10-Q quarterly report issued March 29, 2015. Under LEGAL PROCEEDINGS, the company admits certain subsidiaries are involved in various lawsuits "that arise from time to time in the ordinary course of their business."

It refers to DePuy hip replacement system product liability litigation and the lower sales of women’s health and urology products due primarily to the company decision to stop selling certain pelvic meshes.

And while claims for personal injury against Ethicon and J&J were on the increase, so were claims in Australia, Belgium, Canada, England, Israel, Italy, the Netherlands, Scotland and Venezuela, "all seeking damages from alleged injury resulting from Ethicon's pelvic mesh devices."

"The Company has established an accrual with respect to product liability litigation associated with Ethicon's pelvic mesh products. Changes to this accrual may be required in the future as additional information becomes available." ~ 10-Q SEC Report on J&J March, 29, 2015

Neither filing mentions the number of these claims but a Mesh News Desk story from last year found a J&J SEC 10-Q report putting the number at 33,000 such pending product liability cases at a time there were 22,000 cases filed in the West Virginia court.

Ultimately pressure from shareholders could move along J&J's decision to settle these outstanding claims, now standing at 27,552 (as of July 15) in federal court in WV. #


Mesh News Desk 100-Thousand Mesh Defective Product Cases Now Filed as Mesh Makers Assure Shareholders, September 28, 2014


J&J 8-K report July 14, 2015, SEC


10-Q quarterly report March 29, 2015


J&J Second Quarter 2015 Seeking Alpha- Alex Gorsky CEO J&J talks to investors


J&J SEC filings


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