JNJ Johnson and Johnson

By Jared S. Hopkins and Peter Loftus 

The blood-clot concerns surrounding Johnson & Johnson's Covid-19 vaccine pose a new test for the world's biggest health-products maker.

J&J has faced a number of thorny, headline-grabbing issues during its 135-year history, from cyanide poisoning of its Tylenol headache remedy to quality problems with several of the company's over-the-counter products and cancer concerns about its talcum powder.

The company's handling of the Tylenol poisoning burnished its reputation as a high-minded corporate citizen and became a business-school case study in how companies should handle crises, while its response to the over-the-counter quality problems hurt its standing among consumers and the company's consumer-health business.

U.S. health authorities recommended a pause in the use of the Covid-19 shot Tuesday, following reports of severe blood clots in six women who received the shot.

The clots were rare, and regulators are still investigating whether the vaccine causes the clots.

Yet the issue is forcing the company, a relative newcomer to the vaccine business, to navigate additional scrutiny over safety of its shot. However the clot issue is resolved by regulators, the company will need to respond to concerns held by many in the public on high alert about vaccine safety.

The company was already working through manufacturing setbacks, after problems related to the shot's production by a contract manufacturer.

J&J said Tuesday it is working with health authorities and medical experts probing the rare blood-clotting issue, and supports open communication of the information to healthcare professionals and the public.

Johnson & Johnson, which carries a market cap of $425 billion and notched $82.6 billion in sales last year, is among the most storied names in healthcare. The company's Band-Aids, Johnson's Baby products and Listerine mouthwash are staples in many households.

The New Brunswick, N.J., company's focus has shifted in recent years from the recognizable consumer products to more advanced -- and lucrative -- prescription drugs and medical devices.

Its arthritis treatment Remicade has been among the world's biggest-selling drugs, while J&J has introduced new drugs for various autoimmune conditions, prostate cancer and HIV that have transformed treatment and helped patients.

Despite its size, J&J has a small presence in the vaccine market. Its Covid-19 vaccine is the company's only shot cleared for use in the U.S., although its Ebola vaccine was approved for use by European regulators last year. Potential vaccines for other diseases are still in development.

The company said it developed the Covid-19 shot to meet the challenge presented by the pandemic, not for business purposes, and is selling its vaccine to government customers on a not-for-profit basis during the pandemic emergency.

Yet the recommended pause weighed down J&J's stock, with its shares down nearly 2% early Tuesday afternoon.

Analysts, however, said they didn't expect the clotting issue to affect J&J's overall business because of its size and diversity. Analysts said they expect the vaccine's safety concerns and manufacturing timelines to be discussed next week when the company reports second-quarter earnings.

The U.S. Food and Drug Administration authorized the J&J Covid-19 vaccine's use in February, after it was shown to be highly effective at preventing symptomatic Covid-19.

Health authorities and providers looked forward to the rollout of the shots. The single-dose shot can be stored at more favorable temperatures than other vaccines, making it easier to handle at sites and simplifying vaccination efforts.

The clot issue calls into question the future of the company's vaccine business, which it began expanding about 10 years ago when it made a big bet using a new technology called viral vectors.

AstraZeneca PLC's shot uses similar technology as J&J's, and health regulators have been investigating blood clots involving the British drugmaker's shot for several weeks.

J&J has faced scrutiny for other products, ranging from medical devices to its iconic baby powder.

In 1982, J&J weathered a storm involving Tylenol. At the time, seven people died from taking Extra-Strength Tylenol that someone had laced with cyanide and placed on store shelves. The company quickly alerted the public to the deaths and immediately recalled millions of Tylenol bottles, earning trust among many consumers.

More than a decade ago, J&J recalled millions of over-the-counter drugs over quality issues, including Tylenol and Zyrtec.

Last year, the company said it would stop selling baby powder made with talc in the U.S. and Canada, a decision that came as the company faced thousands of lawsuits alleging the talc powder has harmed women who had used it for years.

J&J has lost trial verdicts and has been ordered to pay billions of dollars in talc-powder cases, but the company is trying to reverse such decisions on appeal. The company has said its talc-containing powder is safe and doesn't cause cancer.

The company is also a defendant in the sprawling litigation related to the opioids crisis. Johnson & Johnson, which at one time sold the prescription fentanyl patch Duragesic, and other companies have been working to broker a deal with state attorneys general and local municipalities since late 2019.

Write to Jared S. Hopkins at jared.hopkins@wsj.com and Peter Loftus at peter.loftus@wsj.com

(END) Dow Jones Newswires

April 13, 2021 14:45 ET (18:45 GMT)

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