This week, Kenvue, the patron well being spin-off from Johnson & Johnson, discovered itself on the epicenter of a market tempest this week. It started when The Wall Road Journal reported Robert F. Kennedy Jr., a longtime promoter of scientifically baseless causes for autism, deliberate to hyperlink Tylenol use throughout being pregnant to the situation. A inventory rout ensued, since Kennedy is secretary of the U.S. Division of Well being & Human Providers and leads the “Make America Wholesome Once more” motion, or MAHA. An intraday hunch neared 15% at one level after the Journal‘s report earlier than retreating, however roughly 9% has nonetheless been wiped off Kenvue’s market cap.
A refrain of Wall Road analysts beg to vary, reaffirming Kenvue’s elementary resilience and seeing this as a possibility to purchase the dip. In notes distributed to shoppers Monday morning, companies corresponding to BofA Securities and Canaccord Genuity inspired traders to view the sell-off as a shopping for alternative somewhat than affirmation of a deep and lasting menace to Kenvue’s enterprise.
No proof, even a combined MAHA response
Canaccord analysts wrote the financial institution believes the authorized danger is minimal given {that a} mass tort lawsuit on related claims “was basically shut down” in December 2023. The financial institution additionally famous an announcement from HHS that any claims about Kennedy’s report had been hypothesis. Calling the market sell-off a “main overreaction,” it added that it sees “no respected research [that] has linked acetaminophen use to elevated danger of [autism spectrum disorder].” The headline danger, if any, is shedding a small phase of customers somewhat than a multibillion-dollar verdict.
Canaccord additionally monitored public sentiment by studying feedback throughout a number of social media codecs, together with these extra prone to assist Kennedy’s MAHA motion. Mainstream channels finds no acceptance of those claims, whereas even “extra fringe” sources produce “combined sentiment” with indicating there’s nonetheless no proof, and others vocal about different seeming conspiracy theories, corresponding to that vaccines trigger autism—additionally unproven, the financial institution notes.
Analysts at BNP Paribas mentioned Friday proving a hyperlink to autism stays unlikely given prior rulings that Tylenol is protected, together with the FDA saying it hasn’t discovered clear proof tying acetaminophen to developmental dangers, and the American Faculty of Obstetricians and Gynecologists making the same advice. The FDA does advise pregnant ladies to test with their docs about utilizing it, although.
No smoking gun
Regardless of ongoing lawsuits, federal judges have to this point discovered the scientific proof linking acetaminophen use in being pregnant to autism or ADHD to be inconclusive, resulting in the dismissal of a number of high-profile instances.
Kenvue itself has forcefully denied any wrongdoing and highlighted the regulatory consensus. In an announcement to the BBC, the corporate mentioned, “Now we have repeatedly evaluated the science and proceed to imagine there is no such thing as a causal hyperlink between acetaminophen use throughout being pregnant and autism.” Nonetheless, the uncertainty isn’t misplaced on Wall Road. A number of notes flagged the potential for elevated authorized bills and PR prices if the controversy drags out.
For these watching carefully, the response throughout Wall Road gives an essential lesson in how medical controversies play out in public markets. Whereas headline danger could rattle shares, nuanced evaluation from analysts can rapidly restore perspective and, in some instances, spark restoration. Because it stands, Kenvue’s Tylenol saga seems to be extra noise than sign—no less than for now, in keeping with these paid to know.
For this story, Fortune used generative AI to assist with an preliminary draft. An editor verified the accuracy of the knowledge earlier than publishing.
