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7:16AM Johnson & Johnson under investigation for Eprex illnesses (JNJ) 49.73: The New York Times reports that the govt is conducting a criminal investigation into a JNJ factory in Puerto Rico that makes its anemia drug Eprex that has been linked to a number of serious illnesses in Europe and Canada; the FDA and Justice Dept investigation is tied to a whistle-blower lawsuit filed against JNJ by a former employee at the factory who contends he was pressed to falsify data to cover up manufacturing lapses and then was suspended a few days before an expected interview with FDA inspectors.

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Paper : Johnson & Johnson under investigation for Eprex illnesses

I'm afraid you're confusing two separate issues which just happen to relate to the same product.

1. 'Eprex illnesses' - the PRCA issue - which is not even unique to J&J - 'relates to recommending IV administration instead of sub-cutaneous to prevent 'clumping' for chronic renal failure patients (only one of the reported cases was not s.c. usage) – competition is being asked to do likewise ( contrary to what Amgen is apparently claiming – some of the cases relate to usage of competitors' products ). Labelling will be changed accordingly.'
http://boards.fool.com/Message.asp?mid=17526146
Where did you see any reports of J&J being investigated for this?

2. Criminal investigation of Eprex manufacturing practices - which is new and is triggered by :
'The New York Times reported on Friday that the FDA and Justice Department were conducting a criminal investigation tied to a lawsuit against J&J filed by a former boiler operator at the plant. The report said the worker was fired in March 1999.

The ex-employee alleged in his suit that he was pressed to falsify data to cover up manufacturing lapses and was suspended from his job a few days before an expected interview with FDA inspectors, the article said.'
http://www.reuters.com/co_news_presentation.jhtml?type=companynews&provider=companynews&StoryID=1224455&symbol1=JNJ&symbol2=JNJ.N

Highly regrettable - but such is the litigious nature of US life. I sincerely hope nothing serious comes out of it - meanwhile JNJ will have to suffer the ignominy of being tarred with the same brush used on other recently infamous companies.





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Something is up because the stock is down 16% this morning on the news.
Reports I'm reading say that a plant in Puerto Rico is being investigated after an anemia drug, Exprex, being produced there was linked to growing evidence of a blood disease in Canada and Europe.

Apparently the employee is suing because he claims he made a fuss about lax procedures at the plant and was fired as a result of that.

JNJ claims the allegations are false and added that even if they warranted merit this wouldn't affect the integrity of the drug.

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Have read several reports about the plant in Puerto Rico and the individual who is making the claim is a boiler operator. Sounds like a maintenance person, not someone who has something to do with making the drugs. Sounds kind of fishy to me.
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Here's the story from the NYTimes (free registration req'd).

http://www.nytimes.com/2002/07/19/business/19JOHN.html

A couple of days ago, I had put in a limit order for JNJ at 47. After the news, the stock opened this morning at 41.50, and I got it at that price. I'm not worried about this news long-term, so I am quite pleased at my pure luck here. But how did it happen when I bid at 47? Not sure if I understand the bid and ask system of Mr. Market.

Infowonk
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I haven't been able to find any details about what type of lawsuit this really is, but the NY Times is calling it a "whistleblower" suit. One thing to keep in mind (and to watch) when a lawsuit is a "whistleblower" suit (a/k/a a "qui tam" suit, for the lawyers out there) is whether the government decides to become a party to the suit. Usually the way it works is that an individual plaintiff brings a qui tam suit, then asks the government to participate (to intervene). The government investigates (sounds like that's the stage at which this suit is now) and decides whether to intervene. In most qui tam cases, the government declines to intervene and the case peters out. If the government becomes a party, that means it sees merit in the case and then it's a whole new ball game. So keep your eye on the feds in this one.

JoanneMK
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Disclaimer: The following comments come from a J&J employee and should be taken as such.

I have to tell you that when a co-worker stopped by this morning and told me about the investigation and the stock sell-off, it brought tears to my eyes and joy to my greedy heart. This could just be my lucky day, I thought. If one investigation and simply publishing a known concern with a drugs usage can do this to J&J's stock price, it says much about the current sentiments of investors.

As a J&J insider, having working many years for another large company before we were purchased by J&J makes me realize just how fortunate I am. At J&J there are some things you simply don't do. Those things are considered so important that we post them prominently in all J&J facilities. The top no-no is to do anything that even remotely might hurt a patient. The second item is to, “Do the right thing”, which is a program making it easy for people to bring concerns forward in a safe forum and to get appropriate action. Knowing this, it makes no sense to fire an operator who was trying to point out a deficiency, if there was one. These people, those who are feel responsible and who will speak up when they are concerned, are exactly what one would want.

After looking up all I could find on the current investigation and Eprex, and finding little that worries me regarding the overall health and stature of the company, I put a substantial buy order in with my favorite discount brokerage. When I find a beat-up dynamic blue-chip company with consistently excellent values and management, I just can't resist.

Just one persons opinion….

Gliderguy
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<<Usually the way it works is that an individual plaintiff brings a qui tam suit, then asks the government to participate (to intervene). The government investigates (sounds like that's the stage at which this suit is now) and decides whether to intervene. In most qui tam cases, the government declines to intervene and the case peters out. If the government becomes a party, that means it sees merit in the case and then it's a whole new ball game. So keep your eye on the feds in this one.>>

I was a bit hasty in my post -- the NY Times article reports that the feds declined to intervene in this suit a year ago, but have reopened their investigation due to the increase reports of problems with the drug. I think my advice still stands -- watch what the government decides -- they may still decide that the qui tam case has no merit.
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The answer to your limit question is that once the price falls through your limit it becomes a market order, which means it will be filled depending on its place in line. It sounds like you've had the order it for a while so this morning the stock opened below your limit and your order became live. You got it very close (if not at)the market open because it was toward the top of the list.

Looks like the market is so skittish that they sell it all and ask questions later. I got some at 42 and change but not quite the deal you got. There's a good chance that the market will figure out it's mistake by Monday and we'll be back above 50 at Monday's close. At least that's the hope.

For those of you who thought 42 represented fair value, here's your crack at it. I never thought we'd see it without something like this happening.

Of course, this could be really serious and destroy the whole company, but I'm betting the other way.

nmckay
in confusion, there's money - once again
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infowonk, I don't understand your question.

If you put in a limit order at 47 why does it surprise you if your order is executed when the shareprice drops below that price?

When you place a limit order you don't get a lower price you get the price you set. Market makers can see your order sitting there and snap it up as soon as the price gets to that level. If a shareprice is dropping quickly it may be much lower before you realize the order has even been executed.

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appreciate the insider views I got from Gliderguy and others on thois board.

coolprash

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J&J is reporting, as Fool News did, that there isn't a link between the lawsuit and the Ebrex problem.

http://biz.yahoo.com/rb/020719/health_johnsonjohnson_probe_1.html


Fool on,

Jeff
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As a J&J insider, having working many years for another large company before we were purchased by J&J makes me realize just how fortunate I am. At J&J there are some things you simply don't do. Those things are considered so important that we post them prominently in all J&J facilities. The top no-no is to do anything that even remotely might hurt a patient. The second item is to, “Do the right thing”, which is a program making it easy for people to bring concerns forward in a safe forum and to get appropriate action. Knowing this, it makes no sense to fire an operator who was trying to point out a deficiency, if there was one. These people, those who are feel responsible and who will speak up when they are concerned, are exactly what one would want.
....


Well, having been a management and technical consultant for J&J, as well as working with operations it pours money into from the RWJF, I believe, in my personal experience, that the company operates on the highest standards of ethics, very reminiscent of AT&T in the old days.

I don't believe J&J or any of its subsidiaries or units would knowingly engage in any practice or policy that might cause harm to either employees or to patients/consumers. Given, GMP, I do not see how the actions of one or a few people could somehow end up circumventing the QA/QC process.

If a drug were supposed to be administered SC vs. IV or IM, that is a matter for the people in charge of documentation of the product, not its manufacture.

RSH.
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"If you put in a limit order at 47 why does it surprise you if your order is executed when the shareprice drops below that price?

When you place a limit order you don't get a lower price you get the price you set. Market makers can see your order sitting
there and snap it up as soon as the price gets to that level. If a shareprice is dropping quickly it may be much lower before you
realize the order has even been executed."

jammerh,

If a market maker saw my $47 limit order sitting there, then why did they not sell it to me at $47 (instead of at $41.50, which is where it executed when the market opened) and pocket a bigger profit. Believe me, I'm not complaining, just curious.

Infowonk
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nmckay answered my limit order question. Didn't see it right away.

Never mind, everybody. Thanks, nmckay.

Infowonk
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Gliderguy, Years ago during my second g0-around in college, I was assigned a semester long project; a case study of one large company. We were to say all we liked/dis-liked about said company, then document w/ good reasoning all of that. This was about a year after the Tylenol scare. I was so favorobly impressed with the way JNJ handled the entire thing, plus I had read the Credo, that JNJ was my pick. (Reecieved an A)
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Sounds to me like someone mistook the seven for a one. No, I wouldn't complain. Usually it goes the other way. At least in my experience.
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I am guilty of buying and selling based on little research other than lifes experience and info from the likes of foolish people. I try to read a lot from different sources. Unbiased sources are sometimes hard to discern but I try. I compare my results to the different portfolios and have discovered "I aint doing to bad". So based on these FACTS I wish I wasn't fully invested so I had some cash to put into JNJ Mon. morning. Did I just hear a pencil snap, or was that a calculator going up in smoke?? Some of my best friends are "Chartist" and Number crunchers"

(:>)
gramps
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Gramps,

Either you believe a company is honest, or you don't. Those are pretty simple rules in my book, of course made nearly impossible to understand by the myriad ways a company can make financial statements, and the accounting methods used thereby.

How much did you earn this quarter, in dollars and not gibbierish?
AFTER EXPENSES and after reserves for anticipated liabilities or expenses? And what were your expenses, exactly?

Surely not in the form of stock option loans to upper executives.

J&J has been honestly run and operated as long as I have known them, and their employees should be an example of pride to the American workforce.

RSH.
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Hunter: That is the point I make. You need to have faith in your co. Not to the point of blind love but faith. I do not have the inclination to crunc a lot of numbers wring my hands and try to find another way to untangle the reports. If they are packing your legs with the numbers, formulas and ratios are not likely to help you. But if you like the work then do the work. However you pick your stocks this has to be enjoyable. I envey those with a cash position. Can you see their numbers by election time???That is if they see the light and invest in this market. Gramps
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I just see this as an excellent buying opportunity.
Look at the long term graph on a log scale and see how you can get rich over time with this stock. With some patience of cause.
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Hunter: That is the point I make. You need to have faith in your co. Not to the point of blind love but faith. I do not have the inclination to crunc a lot of numbers wring my hands and try to find another way to untangle the reports. If they are packing your legs with the numbers, formulas and ratios are not likely to help you. But if you like the work then do the work. However you pick your stocks this has to be enjoyable. I envey those with a cash position. Can you see their numbers by election time???That is if they see the light and invest in this market. Gramps


Er, I think I agree with you...

And yes and no. I believed in AT&T and Lucent with all my heart, and in the case of LU, we were betrayed by management behavior that would have been unthinkable, unimaginable, and, well, unspeakable, in the 100 some year history of Western Electric and Bell Telephone Laboratories; the fact I personally knew (a few meetings, I guess that isn't enough to show someone's true colors) the fomer CEO that put LU into the garbage disposal, and "retired" or "resigned" with benefits that make even the ENRON people look good, lies heavily on me.

The Bell System was once the shining pride of America, in theoretical, pure research; in applied research; in manufacturing; human factors and industrial and general psychology; in safety; in, of course designing and implementing the most complex and successful telephone system in the world, as well as inventing the telephone itself, the transistor, LASER, radio astronomy, and many other things, such as running the Manhattan Project, along with DuPont, as the primes. We did a lot of thankless and dangerous things assisting our country, some of which have only now become public, most of which will never see the light of day, in my lifetime, at least.

But above all, no matter how much people carried on about their phone bills, or how Ma Bell wasn't responsive enough, and the sneaky [and illegal] way MCI got into the market, we had our honor, and our pride, and integrity. And except for out worst detractors (who had motives of their own, like MCI), nobody ever called the Bell System a bunch of crooks.

AT&T and Lucent people, the handful remaining from the old days, still remember that. The new wave weren't raised with values like "Preserve the privacy of communications and records of subscribers at all costs"; even if Federal Marshalls or whatever show up, (or worse, '60 Minutes'), you send them to Corporate Legal, no matter what warrants or subpoenas they might have.

Johnson & Johnson is an American company; nearer to my heart is they are also a New Jersey company, even though I am an expat to Montana. They have a committment to their employees that I have rarely witnessed elsewhere; the old AT&T/Bell, and Pharmacia, are the only ones that come to mind (where I have managed and/or consulted); this isn't a dig at the other pharma companies, I haven't been inside them.

At ODSI (Ortho Diagnostics), we used to joke, when in the checkout line in the cafeteria, that the "Well Employee" program (whatever they called theirs) installed secret scales in the floor, by the register, and the cashiers would take stuff off your tray you shouldn't eat. Pharmacia was much the same way, as was AT&T; AT&T Universal Card was the worst, being ISO-9000 compliant and being awarded the Baldridge by President Bush (I) personally (of course they were sold to some big New York bank later.) For them, "perfect" was barely good enough.

J&J's RWJ Foundation revitalized health care in New Jersey, donating more money than I can imagine.

When the city of New Brunswick had gone to Hell and apparently was going to remain there, J&J as a corporation, and RWJF, poured tons of money into reviving the decrepit, crime and drug ridden town, through loans and outright grants, and in about 5 years, you wouldn't believe it was the same city. And they continue to pour money into UMDNJ/RWJ (University of Medicine & Dentistry New Jersey [formerly Rutgers University Medical School] and their affiliated teaching hospitals, all over the state.

Why?

Because New Brunswick is still HQ to J&J and home. And so is New Jersey. RWJF has supported hospice, VNA, HHC efforts, education about and the treatment of HIV/ARC/AIDS before it was politcally correct(especially in NJ of course); they funded sending my mother (an RN who pioneered hospice, HHC/VNA, and the fight against pain and suffering of terminal patients) all over the USA both to attend and to speak at seminars and symposia on managing unbearable pain (while maintaining the highest level of functioning for the patient), grief, the general probles of AIDS and terminal cancer. And Johnson & Johnson has never forgotten their roots, despite operations ranging from all over NJ to Janssen (Sweden), and other sole or partnered operations all over the world.

I don't hold one single share of JNJ, or anybody.

But I place this company among my top 5, for its vigorous efforts to give back to the community, for its dedication to quality, for its ethos, for its distinguished history and accomplishments, and finally, for the fact that I believe America will learn (is learning) the shocking truth that "Nice guys finish first", and JNJ is certainly among them.

RSH.


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