Healthcare giant Johnson & Johnson (NYSE:JNJ) got good news on Friday when a Philadelphia judge drastically reduced the $8 billion punitive damage verdict the company was initially ordered to pay in October down to just $6.8 million.
The original fine was awarded by a jury to a plaintiff who experienced unwanted side effects from the company's Risperdal medication, which is used to treat people with schizophrenia, bipolar disorder, and it also helps people with autism. The plaintiff in the case, Nicholas Murray, began taking the medication as a child to treat behaviors related to autism, but the drug caused the young man to grow breasts -- a condition called gynecomastia.
The punitive damages were in addition to a $680,000 compensatory award the plaintiff would receive. Johnson & Johnson challenged the ruling, and today it learned of the reduction to the punitive fees.
Just one of many problems for J&J
Friday's ruling offers some much-needed positivity for Johnson & Johnson, as it has been under pressure for the past few years from product liability litigation.
Some consumers alleged the company's baby powder products led them to develop ovarian cancer. There have also been problems relating to vaginal mesh products in Australia, where the company lost a case last year. Oklahoma came after J&J for its role in the opioid crisis and a judge ruled the company would be fined $572 million, which was reduced to $465 million in November.
Amid all these controversies, Johnson & Johnson's stock rose a modest 13% in 2019, well below what was a fantastic year for the markets that saw the S&P 500 climb 30%. Despite Friday's positive result, the healthcare stock was up less than 1%.