A report published by Reuters has resulted in a 10 per cent plummet of Johnson & Johnson shares.
The report indicated that the US pharmeceutical giant knew about asbestos tainting their talcum powder for decades, and comes at a time where the company is faced with thousands of lawsuits claiming its talc products cause cancer.
Documents revealed the company was aware of traces of asbestos for nearly 50 years, reports BBC.
However, lawyers of J&J claim "Johnson & Johnson's baby powder is safe and asbestos-free.
"The Reuters article is one-sided, false and inflammatory. Simply put, the Reuters story is an absurd conspiracy theory."
They also said even if the report was true, it wouldn't contribute to health issues.
"The scientific consensus is that the talc used in talc-based body powders does not cause cancer, regardless of what is in that talc," Attorney Peter Bicks added.
"This is true even if - and it does not - Johnson & Johnson's cosmetic talc had ever contained minute, undetectable amounts of asbestos."
Documents produced, as part of the trials and reviewed by Reuters, revealed that from at least 1971 to the early 2000's, the firm's internal tests sometimes found small amounts of asbestos in its raw talc and finished powders.
While most of the tests did not find asbestos, the ones that did were not disclosed to regulators.
Mr Bicks says these tests were "outlier" results and in court, argues some of the documents referred to industrial talc products.
At one point, the investor reaction wiped 10% off J&J's market value, making it the biggest loser on the Dow.
In July, J&J was ordered to pay over $66 billion in damages to 22 women, alleging it's talc products were the reason behind them developing ovarian cancer.
This marked the firm's largest payout over the allegations. It is appealing against the decision.