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

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

In Saturday’s report (Friday local time), Reuters cites documents released as part of a lawsuit by plaintiffs claiming that the product can be linked to ovarian cancer.

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

Shares are down more than 9 per cent, the most severe decline since 2002.

JUST IN: Johnson & Johnson shares down 3.7 percent after @Reuters reports company knew for decades about asbestos in its Baby Powder https://t.co/1vA8Vc1GcC pic.twitter.com/O009RKDFiJ

— Reuters Business (@ReutersBiz) December 14, 2018

In the report, Reuters points out that documents show consulting labs as early as 1957 and 1958 found asbestos in J&J talc.

Further reports by the company and outside labs showed similar findings through the early 2000s.

In its statement on Friday, Johnson & Johnson said that “thousands of independent tests by regulators and the world’s leading labs prove our baby powder has never contained asbestos”.