Blog Coverage J&J Bailed Out from $1 Billion Lawsuits, Settled the Claim for About $500 Million

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LONDON, UK / ACCESSWIRE / January 5, 2017 / Active Wall St. blog coverage looks at the headline from Johnson & Johnson (NYSE: JNJ). The Company and its orthopaedic unit, DePuy, reached a major settlement with California-based plaintiffs, on January 04, 2017. US District Judge Ed Kinkeade in Dallas halved the award for the December jury verdict by almost $500 million from the previous $1 billion remunerations to the plaintiffs in six lawsuits. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

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The J&J Implants Case

J&J was ordered by a Texas jury on December 02, 2016, to pay over $1 billion to patients who filed a lawsuit against the Company and its orthopaedic unit, DePuy. The claim was regarding the case where J&J reportedly hid flaws in its Pinnacle artificial hips, which had to be removed surgically after numerous complications.

According to the conclusion drawn by the federal jury in Dallas, officials of the DePuy unit knew about the defect in devices but failed to warn doctors and patients of the risk associated with it. According to the filings, the verdict includes $30 million reimbursements in actual damages for the six plaintiffs while about $1 billion was for punitive damages.

The Pinnacle Hip Replacement System

DePuy boasts of a portfolio which comprises of more than 200 products. However, some of these products have cost the firm and its parent company, J&J, dearly. DePuy designed the Pinnacle Hip Replacement System, the ASR XL Acetabular System total hip replacement, and the ASR Hip Resurfacing System, to facilitate hip replacements in relatively younger patients by offering enhanced flexibility and greater range of motion when compared against conventional hip replacement devices.

The primary flaw with the Pinnacle Hip Replacement was the metal-on-metal construction. Even though the design was developed to minimize failure rates due to overuse, it created several serious problems. As per several lawsuits and studies, the Pinnacle led to elevated failure rate, infection, dislocation, metallosis, and immobility.

Complications from the Metal-on-Metal Hip Implants

Several patients reported serious complications after receiving a DePuy hip implant. While some patients reported of the implant loosening within the body, others revealed bone fracture near the implant site. Cases of Metallosis (metal poisoning), difficulty in walking, unexplained pain in the thigh and hip, and dislocation of two parts of the implant have been observed as well. Owing to these complications, a second surgery, known as revision surgery was conducted in numerous patients.

The Lawsuits

J&J faces thousands of claims included in an MDL (Multidistrict Litigation) in the US District Court for the Northern District of Texas under the supervision of Judge James E. Kinkeade. In March 2016, a federal jury awarded $502 million for a lawsuit settlement of five Texas residents owing to the Pinnacle Artificial Hip Implant case.

Settling the Cases

In 2013, the US Food and Drug Administration toughened artificial-hip regulations which led to J&J concluding the sale of the concerned devices. The firm still faces about 9,000 lawsuits accusing it of developing faulty hip replacement systems.

J&J won the first Pinnacle hip lawsuit in October 2014, when the jury rejected a Montana woman’s claim that the artificial hip implant from J&J caused metal poisoning in her body. The verdict set at $503 million for the artificial hip system in March 2016, was slashed to $150 million in July.

Stock Performance and Dividend

At the closing bell, on Wednesday, January 04, 2017, Johnson & Johnson’s stock marginally declined 0.16%, ending the trading session at $115.65. A total volume of 5.83 million shares were traded at the end of the day. In the last month and previous twelve months, shares of the Company have advanced 3.30% and 17.86%, respectively. Moreover, the stock gained 0.38% since the start of the year. The Company’s shares are trading at a PE ratio of 20.27 and have a dividend yield of 2.77%. The net market capital for the firm stood at $315.39 billion at the close of Wednesday’s session.

J&J announced its quarterly dividend for Q1 2017. The Board of Directors announced a cash dividend of $0.80 per share on the firm’s common stock.

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