J&J's stock dips in wake of recall

Perhaps Johnson & Johnson (NYSE: JNJ) shareholders will be able to accomplish what has so far eluded Congress and the FDA: Compliance by the manufacturer of one of the most popular household drug brands. And this "compliance" cuts two ways--the regulatory GMP way, as well as the willing-to-disclose-and-cooperate way.

The Wall Street Journal reported late last week that the ever-expanding Tylenol recall has finally dinged the drug giant: J&J's stock market presence has begun to pale. The paper cites the recall as the cause. And although they are not expected to be "financially devastating," the recalls have marred J&J's image.

"As the news has come out, J&J has underperformed," the article says. The stock reached its lowest point in almost a year.

Shareholders eventually take action, often swift and sure. Those at J&J have appeared content to bide their time with CEO Bill Weldon as the recall and its underlying manufacturing quality neglect spilled out of the FDA and into Congress. But now the threat to investors is palpable. That pharma manufacturing operations--generally averse to spotlights and more comfortable in the shadows of drug discovery and development--can bring the giant J&J to this point is a credit to all of the drug companies that invest in their operations to keep at the top of the drug making game.

It's hard to imagine an investor's stalking of a CEO more tenacious than the one involving Carl Icahn and Henri Termeer at Genzyme, unless of course you tune into Animal Planet. Or a board action as swift and decisive as the one that ushered David Van Vliet from the KV Pharmaceutical executive suite. Weldon has the distraction of big business' chief lightning rod Tony Hayward at BP to thank for his extended stay at J&J, through the demise of the Tylenol and J&J brands. But now that Hayward's out, perhaps Weldon will get his time in the spotlight.

- here's the article