Johnson & Johnson has been hit with a shareholder suit linking a drop in the company's stock price to allegedly false statements it made about asbestos in its talc products.

The company artificially inflated its stock price by failing to disclose what it knew about links between cancer and Johnson's Baby Powder, according to the suit.

The action, filed Thursday in federal court in Newark, New Jersey, comes just as Johnson & Johnson faces thousands of injury suits blaming its Johnson's Baby Powder and Shower to Shower products for ovarian cancer and mesothelioma. The company has maintained that its products are safe and contain no asbestos.

But the shareholder suit claims the company has known for years that its baby powder and other talc products contain asbestos fibers and that exposure to those fibers can cause ovarian cancer and mesothelioma.

“Defendants misrepresented and failed to disclose the danger that J&J's talc products posed to consumers, J&J's significant contingent liability related to its talc products, and that J&J's revenues from sales of these products were unsustainable due to the dangerous and harmful nature of its talc products,” according to the suit, Hall v. Johnson & Johnson, filed Thursday.

In addition to the company, Johnson & Johnson Chairman and Chief Executive Officer Alex Gorsky and Executive Vice President and Chief Financial Officer Dominic Caruso were named as defendants.

“Plaintiff and the other members of the class relied on the statements [of Gorsky and Caruso] and/or the integrity of the market price of J&J securities during the class period in purchasing J&J securities at prices that were artificially inflated as a result of the Company's and the Individual defendants' false and misleading statements,” the suit claims.

The named plaintiff in the shareholder suit, Frank Hall, lost about $6,000 from trading Johnson & Johnson stock. Hall bought 500 shares of Johnson & Johnson stock at $143 per share on Jan. 29, then sold those shares at $134 each on Monday, the suit says. Then, on Wednesday, he bought 500 shares of Johnson & Johnson stock at $132 per share, and sold it on Thursday for $129 per share.

Hall certified that he did not acquire the Johnson & Johnson stock at the direction of plaintiff's counsel or in order to participate in the present suit or any other securities litigation.

The suit accuses all defendants of violation of Section 10(b) of the Securities Exchange Act and Rule 10b-5, and asserts a violation of Section 20(a) of Securities Exchange Act against the individual defendants.

The shareholder suit, citing company statements in Reuters and Bloomberg articles from 2016 and 2017 claiming that its talc products are free of asbestos, said the company “made false or misleading statements” and/or failed to disclose that it has known for years that its talc products include asbestos and that exposure to those fibers can cause ovarian cancer or mesothelioma. As a result, Johnson & Johnson's public statements “were materially false and misleading at all times,” the suit claims.

The suit said common questions predominate over questions facing individual class members, such as whether the defendants' actions violated federal securities laws, whether the defendants' statements misrepresented material facts, and whether the company misrepresented its financial condition or business operations. In addition, the litigation would need to examine whether Johnson & Johnson's statements to the investing public omitted material facts, whether the company's stock price was artificially inflated because of the defendant's false information, and whether the class members sustained damage as a result, according to the suit.

The plaintiff cites a September 2017 Bloomberg article headlined “Johnson & Johnson alerted to risk of asbestos in talc in '70s, files show,” which stated that “documents indicate that J&J has known for decades that its talc products include asbestos fibers and that the exposure to those fibers can cause ovarian cancer.” That report caused shares of Johnson & Johnson to fall $2.28 over a five-day period, closing at $129.47 on Sept. 28, 2017.

Also cited was an article published Monday by CNBC, headlined “Johnson & Johnson falls on report that lawsuits could expose potentially damaging documents.” On that news, the company's stock fell $7.29, or 5 percent, from its previous closing, ending at $130.39 per share on Monday.

The suit was filed by Laurence Rosen of South Orange, New Jersey, and Ben Crump of Tallahassee, Florida, who did not return calls about the case. A Johnson & Johnson spokesman did not respond to a request for comment about the case.