Johnson & Johnson has forcefully denied a media report that it knew for decades about the existence of trace amounts of asbestos in its baby powder.

Key points: Reuters cited documents released as part of a lawsuit claiming Johnson & Johnson baby powder can be linked to ovarian cancer

Reuters cited documents released as part of a lawsuit claiming Johnson & Johnson baby powder can be linked to ovarian cancer Johnson & Johnson stock fell 10 per cent on the back of the report

Johnson & Johnson stock fell 10 per cent on the back of the report The company has called the report "one-sided, false and inflammatory"

The report by the Reuters news service sent the company's shares into a tailspin, suffering their worst one-day sell-off in 16 years.

Reuters cited documents released as part of a lawsuit by plaintiffs claiming the product can be linked to ovarian cancer.

The New Brunswick, New Jersey company has battled in court against such claims and on Friday called the Reuters report "one-sided, false and inflammatory".

"Simply put, the Reuters story is an absurd conspiracy theory."

Johnson & Johnson's stock fell US$14.84 ($20.66), or 10 per cent, to close Friday at US$133 ($185.19), its most severe single-day decline since 2002.

In the report, Reuters claimed documents show consulting labs as early as 1957 and 1958 found asbestos in Johnson & Johnson talc.

Further reports by the company and outside labs showed similar findings through the early 2000s, according to the Reuters story.

In its statement, Johnson & Johnson said: "Thousands of independent tests by regulators and the world's leading labs prove our baby powder has never contained asbestos."

AP