3:30 PM
J&J CEO to address recalls; Tylenol brand dips
Addison Ray
By Susan Heavey and Ransdell Pierson
WASHINGTON/NEW YORK | Tue Sep 28, 2010 6:19pm EDT
WASHINGTON/NEW YORK (Reuters) - Johnson & Johnson's (JNJ.N) massive recall of popular medicines, including a stealthy recall of some Motrin packages, has eroded the company's reputation and put pressure on chief executive Bill Weldon who appears before a congressional committee on Thursday.
J&J recalled 40 widely used nonprescription products for children and infants, such as Tylenol, in late April after Food and Drug Administration inspectors found filthy equipment and contaminated ingredients at a Pennsylvania factory.
The plant operated by J&J's McNeil unit is still closed, crimping sales, cutting the consumer standing of well-known J&J brands and marring Weldon's generally successful eight years at the helm.
Combined with several other recalls since January, the company has pulled nearly 200 million bottles of various medicines.
No injuries from recalled products have been reported but industry analysts say consumers have turned to cheaper, store brand alternatives.
How "is J&J going to rebuild a product loyalty and product identity when the products have been off the market for so long," asked Ira Loss, who follows FDA matters for Washington Analysis Corp.
It will be Weldon's first major appearance on the recalls. He did not appear at a congressional hearing in May; the company said he was recovering from back surgery.
Other witnesses due to appear before the U.S. House of Representatives Oversight and Government Reform Committee on Thursday include FDA Deputy Commissioner Joshua Sharfstein and Colleen Goggins, the company's longtime consumer healthcare chief who is due to leave March 1.
J&J's recalls have prompted Committee Chairman Edolphus Towns to push legislation giving the FDA greater recall power.
WELDON'S FUTURE
There is no mandatory retirement age for CEOs at J&J. Weldon, the silver-haired native New Yorker who joined the company 39 years ago, has not announced plans to retire.
Some analysts said Weldon could stay for another year or so to get improvements in place before making what could be seen as a natural exit.
"This will be just a minor blemish on what's been a steadily growing company," said Gabelli & Co analyst Jeff Jonas, who said a leading Weldon successor is Dominic Caruso, the company's gregarious chief financial officer who is often front and center at company investor meetings.
Investors have so far been forgiving. Since the April recall, its shares have roughly matched the overall market, falling 3.5 percent compared with the 3.8 decline in the S&P 500 index .SPX.
But a survey released Tuesday showed consumer opinion of Tylenol products, even those not recalled, slipping among consumers from 2009.