Johnson & Johnson shares on Wednesday climbed after the company proposed paying $8.9 billion to settle thousands of claims that its baby powder and other talc products caused cancer.
More than 60,000 claimants have committed to support the proposed resolution, which would require approval in bankruptcy court, the company announced in a securities filing late Tuesday.
J&J’s stock closed nearly 4.5% higher Wednesday. The company’s market value stands at more than $430 billion.
The pharmaceutical giant also said its subsidiary LTL Management refiled for Chapter 11 bankruptcy protection after its first attempt faced legal challenges. The subsidiary is shouldering tens of thousands of talc lawsuits in a bid to reduce J&J’s losses from litigation and settlement.
Some lawyers representing plaintiffs in the talc lawsuits called J&J’s proposal a “significant victory” in a legal fight that has lasted more than a decade.