Johnson & Johnson emphatically rejected a report that the company had known for decades that there were traces of asbestos in its baby powder.
The report, published Friday by the Reuters news agency, caused the company's shares to plummet, and the company suffered its worst stock auction in 16 years.
Reuters cited documents released as part of a lawsuit that claims the product may be linked to ovarian cancer.
The New Jersey firm challenged such allegations in court, and on Friday called the Reuters report "Sluggish, false and inflammatory".
Fall in the bag
Stocks fell more than 9%, the biggest decline since 2002.
In its report, Reuters says there are documents indicating that laboratories hired for counseling have found asbestos in J & J talc since 1957 and 1958.
Subsequent reports from the company and external laboratories produced similar findings until the early 2000s.
Johnson & Johnson said in a statement on Friday that "Thousands of independent tests conducted by regulators and leading laboratories around the world have proven that our baby powder has never had asbestos".
Despite what has already been said by the company, the company currently faces more than 10 thousand lawsuits, mainly for cases of ovarian cancer.