The bad news this time arrived at 3:07 p.m. on Feb. 10 in a phone call to David R. Clare, president of Johnson & Johnson. As he listened, the 60-year-old Clare glanced at his watch and scribbled cryptically on a yellow pad:

"1507. Joe Chiesa. Potential recall in Bronxville."

Thirty minutes later there was another call from Chiesa, the animated president of McNeil Consumer Products Co., the Johnson & Johnson subsidiary that makes Tylenol. "It's true," Chiesa said glumly. A young woman in Bronxville, N.Y., was dead, apparently poisoned by Extra-Strength Tylenol capsules spiked with potassium cyanide, and stores were yanking the pain-reliever off the shelves.

An ashen Clare hurried across the 11th floor of Johnson & Johnson's headquarters here to the office of Johnson & Johnson's chairman, James E. Burke. "We've got a real problem," Clare said.

Instinctively, Burke knew it was Tylenol again. Two nights earlier, on the same Saturday evening when Diane Elsroth, 23, was dying in Bronxville, Burke had dreamed that the Chicago poisonings of 1982 were recurring, the seven victims dying again.

In the 40 months since those unsolved killings, Johnson & Johnson's top management had lived in dread that it would happen again, that someone clever and persistent enough to outwit the triple seals on Tylenol bottles would strike. "It hung like a sword of Damocles," said Burke, giving the chairman sleepless nights on the anniversaries of the Chicago deaths.

"When the phone rang at night," added David E. Collins, chairman of McNeil, "you were always sure that either one of your kids had been hurt in a car wreck or that there'd been another Tylenol murder."

Nevertheless, the $6 billion company -- a family of 162 companies, really, scattered around the globe -- had been soaring. Once a cottage industry with 14 workers atop an old wallpaper factory, Johnson & Johnson in 1986 was entering its centennial year as king of the world's health-care trade with 74,000 employes.

Most remarkable was the resurgence of Tylenol. After near extinction following the unsolved Chicago poisonings, Johnson & Johnson's most lucrative product had climbed to an even larger share of the $1.6 billion over-the-counter analgesic market. Completely recovered from that $250 million loss, Johnson & Johnson was again dreaming of Tylenol expanding its one-third slice of the market to one-half, or more.

But it all ended with that Monday call to Clare. In the past two weeks the company has permanently scuttled its capsule business -- at an estimated loss of $150 million. Truckloads of recalled Tylenol are being stacked in warehouses in Minnesota and New Jersey, an event reminiscent of the 32 million recalled capsules incinerated in 1982.

As the company again wrestles with some of the most fundamental issues of selling, the hunt continues for killer, motive, means and "point of adulteration," that is, where the spiking occurred. After microscopically analyzing the apparently undisturbed wrapping of a second tainted bottle found in Bronxville, company specialists are convinced that the triple seal had been delicately opened and resealed.

Johnson & Johnson has hired a Miami investigative firm to scrutinize the plants in Puerto Rico and Pennsylvania where the two tainted bottles were made, as well as the distribution center in Pennsylvania. A list of "fewer than 10" employes with access to both plants when the Tylenol was made last summer has been given to the Federal Bureau of Investigation, along with a longer list of potentially disgruntled employes. Two Johnson & Johnson lawyers have camped out in the Sheraton Hotel in New Rochelle, N.Y., next to the FBI office handling the case.

Convinced that this poisoning was an unrelated copycat of the Chicago murders and that the adulteration could not have occurred at the plants -- "virtually impossible," according to a Johnson & Johnson memo to the FBI -- employes at the graceful white headquarters complex here speculate endlessly. Brows knit, lips purse and theories tumble about: Someone with a grudge against Diane Elsroth or her friends? Someone with a grudge against Johnson & Johnson? A stock manipulator? A competitor? A nut?

For the most part, though, the company is concentrating on what it does best -- peddling products from Band-Aids to baby powder and zealously guarding a reputation for quality.

But the stigma facing Tylenol was perhaps best demonstrated by Clare, who went home late on the night of Feb. 10, shook two Extra-Strength Tylenol into his hand from a half-empty bottle in the medicine cabinet -- and hesitated just long enough to scrutinize the white half of the capsules. A hundred million consumers similarly would pause, some of them even sniffing, consciously or subconsciously, for the almond scent of cyanide.

Having been through the ordeal before, Johnson & Johnson knew the fundamentals of what had to be done within hours after news of the Elsroth death. Halt capsule production; offer a $100,000 reward; hunt down all bottles in lot ADF 916, which had been made in Fort Washington, Pa., last May; suspend all advertising (although not before Burke was horrified to see a new Tylenol commercial appear on an ABC News broadcast just before a story on the Bronxville murder).

Lawrence Foster, Johnson & Johnson's vice president for public relations, was vacationing at Captiva Island, Fla., when he got the word from New Brunswick. Foster had just finished an interview with a Wall Street Journal reporter, who wanted to compare Johnson & Johnson's widely admired handling of the Chicago disaster with the National Aeronautics and Space Administration's less admired handling of the shuttle Challenger explosion. Johnson & Johnson was considered something of a maven on catastrophe, and whenever high-profile calamity struck -- from Bhopal to Cape Canaveral -- the company was petitioned for comment.

Before hurrying back to New Jersey, Foster drafted a statement for release in New Brunswick that pledged full cooperation with investigators and news media. "We had built up an incredible credibility in the last three years," he recalled later. "Everybody put us on a pedestal for the way we handled Chicago" and it was critical to sustain that faith.

Monday melted into Tuesday as the company continued to field reporters' calls until 1 a.m. Consumer opinion polls indicated that the national hysteria was considerably more restrained than after the Chicago deaths, but there were still difficult decisions about whether to limit the capsule recall to the Bronxville area or extend it to the tri-state region.

As the investigation continued, Illinois authorities sent their New York counterparts six filing cabinets stuffed with 6,000 dead-end leads from the 1982 crime. Johnson & Johnson put five lawyers on the case, headed by corporate counsel George S. Frazza, who began examining everything from whether the killer had somehow obtained surplus Tylenol bottles to whether the lot numbers had been counterfeited. On Wednesday, McNeil initially told Johnson & Johnson that the killer would need special equipment to reseal tampered bottles, but an engineer subsequently explained to the corporate brass that the killer needed no sophisticated equipment.

On Thursday, Feb. 13, company executives gathered for a technology review in a frustrating search for ways to make Tylenol capsules not only tamper-resistant but failsafe. Burke was summoned from the meeting by a call from Washington.

It was Commissioner Frank Young of the Food and Drug Administration, who asked, "Jim, are you sitting down?"

"No," Burke answered.

"Well, we've found a second bottle."

The FDA had discovered five capsules laced with cyanide in an F.W. Woolworth's store a block from the A&P supermarket where the first bottle had been purchased. This bottle, part of lot AHA 090 made in Puerto Rico last July, was among 1,728 bottles sent to Woolworth's distribution center in Denver and subsequently dispersed to 450 stores in the Northeast. A Johnson & Johnson salesman sent to retrieve the Woolworth's inventory in Bronxville earlier in the week had been scared away by the sight of reporters coincidentally talking to the manager.

Clare, who had been eavesdropping on the Young call, returned to the meeting and dourly signaled thumbs down to Collins, the McNeil chairman. The technology review agenda was abandoned for a broader discussion that Clare opened with two words: "Now what?"

It became increasingly evident that the capsules had to go, permanently, and no one felt the painful irony more than Jim Burke. A member of the Harvard Business School class of '49, eventually dubbed "The Class That Money Fell On" by Fortune magazine for the dazzling success of its members, the 60-year-old Burke was virtually venerated in the industry for his instincts about consumer psychology.

Ten years ago, when Tylenol was hardly a blip on the pain-relief market, Burke had led the charge among Johnson & Johnson's go-go marketing executives to pressure conservative McNeil to slash the price by one-third, develop an extra-strength version, advertise heavily and use capsules. He knew that consumers believed, erroneously, that capsules were more potent; the 35 percent placebo effect of all analgesics would be enhanced by putting Tylenol in capsules. Within six years, Tylenol surpassed Crest toothpaste as the world's top health and beauty product.

In the debates last weekend, some McNeil executives were reluctant to abandon success. Let's not do anything rash, let's think it through, Chiesa argued last Sunday. For one thing, it was doubtful that the competition, which was flooding the airwaves with extra advertising, would abandon capsules.

It was clear, however, that a third round of killings would forever finish Tylenol and shatter Johnson & Johnson. "I don't think I can take another one," Collins replied. "I don't think Johnson & Johnson can take another one."

The company had experimented extensively with techniques developed by a Michigan firm to seal individual capsules with sound waves. After examining thousands of sonar-sealed capsules, including tests of how they held up under the stress of shipping, Johnson & Johnson had concluded that the method was effective but not infallible.

Some sealed capsules leaked. Moreover, the company believed that someone who was dexterous and patient could open a few sealed capsules, taint and reseal them without it being evident. To prove the point, Clare dramatically brought the sealed capsule of a competitor into a meeting Monday and demonstrated how to break in.

Burke told McNeil the company had until Thursday, the 20th, to brace itself for an end to capsules. Then the announcement was moved up to Tuesday, the 18th. But over the weekend, John Walcott, the company's chief financial officer, argued that such a dramatic move as giving up capsules could have unpredictable effects on Johnson & Johnson stock and that there was a chance of insider information leaking.

Consequently, on Monday afternoon when the market was closed for Presidents' Day, Burke held his third news conference in less than a week to announce that Johnson & Johnson was leaving the over-the-counter capsule business. The announcement was piped into the McNeil headquarters in Pennsylvania; some veteran workers wept at the injustice, but for many there was a collective sigh of relief that 3 1/2 years of anxiety about another attack were over.

Burke also announced that the company had decided to promote "caplets," solid oval pills with a smooth coating first marketed in 1984. For the past year, the company had so vigorously pushed caplets in hopes of gradually replacing capsules that the new form accounted for 22 percent of Tylenol sales. Now optimists such as Chiesa thought that within a year, caplets also could largely fill the vacuum left by the capsules, which had been 30 percent of the Tylenol business.

To punctuate his point on Monday, Burke held up a caplet-shaped paperweight that Foster had given him as a last-minute prop after dulling the shine offensive to television lights. The picture of Burke holding up the "new" Tylenol appeared in millions of homes.

An enormous amount of work remained. Caplets were made in Puerto Rico and shipped to Round Rock, Tex., for the "spray-and-bake" coating, which was the bottleneck in the process. Despite expanding caplet production Feb. 13 and starting the hunt for outside spray-and-bake firms two days later, Johnson & Johnson was faced with a potential caplet shortfall.

A McNeil national sales meeting today in Arizona, originally intended to celebrate a decade of Tylenol success, instead has been restructured to fire up the company's drummers with caplet ebullience. More than 2,500 Johnson & Johnson "detail men" will be unleashed on the nation's doctors and other health professionals this week, their sample cases stuffed with caplets.

All production and packaging procedures will be reviewed, including the possibility of posting guards above production lines. Stacks of advice have poured in from consumers. Although less inventive than after Chicago -- when the mail included a $5 billion extortion note from a young boy who included his home address and an offer from the Colorado School of Mines to extract cyanide from tainted capsules so thoroughly that they could still be sold -- the suggestions this time have a certain folksy ingenuity, from sealing Tylenol in coffee cans to a 39-step package guaranteed to be "almost foolproof."

Print advertising resumed Thursday with a full-page ad offering to refund money for capsules or swap them for caplets ("As you know, there's been a tragic event . . . "). Television advertising began this weekend after a furious internal debate over whether to use Burke in emulation of Chrysler Corp. Chairman Lee A. Iacocca; Burke, who before the Chicago murders had never been on television in more than 30 years with the company, objected to creating a cult of personality and scotched the idea.

To boost Johnson & Johnson morale, bumper stickers, buttons and T-shirts are being printed with a caplet pun: "Tylenol, A Solid Comeback." Less easily remedied, perhaps, is a sense of corporate guilt even more intense than after the 1982 poisonings.

"Seven people died," Clare said of the Chicago murders. "And our product was the weapon. Although it was a new event in the whole history of the FDA and medications generally, shouldn't we have anticipated it somehow?"

And now? "Much more so. We were three years late. That's exactly how we feel," Clare said.

And the return to capsules in 1982? "We wish we hadn't done it. With 20/20 hindsight, I wish we wouldn't have done it.