Shares of Kenvue Inc.
KVUE,
gained nearly 5% Tuesday morning after a federal court’s ruling in a product-liability case appeared to work in the Tylenol maker’s favor.
The case involves multiple product-liability lawsuits, now consolidated in a New York federal court, filed against the manufacturers of Tylenol and generic acetaminophen and alleging that in-utero exposure to the drug caused children to develop autism spectrum disorder and attention-deficit hyperactivity disorder.
Judge Denise Cote of U.S. District Court for the Southern District of New York on Monday granted the defendants’ motion to exclude plaintiffs’ expert opinions on whether in-utero exposure to acetaminophen could cause the autism and attention-deficit disorders. The scientific evidence on prenatal use of acetaminophen “presents a challenge for any expert witness offering the opinion that such use causes” the disorders, Cote wrote in her opinion.
The Food and Drug Administration, Cote noted, has evaluated the risks at issue in the case multiple times and has not found a causal link between acetaminophen and neurodevelopmental disorders.
The court’s ruling “is a clean sweep for the defendants,” J.P. Morgan analysts wrote in a research note Monday, adding that the ruling “effectively collapses the plaintiffs’ case in the multi-district litigation.”
Kenvue, the consumer health business spun off from Johnson & Johnson
JNJ,
earlier this year, will seek to have the lawsuits dismissed, the company said in a statement Tuesday, “as there is the potential for unfortunate, real, and long-term public health consequences in allowing scientific guesswork in courtrooms to inform medical decision-making.”
As for the safety of acetaminophen, Kenvue said it is “one of the most studied medications in history” and recommended by doctors as a first-line treatment for pregnant people who have fever or pain.
Major retailers including CVS Health
CVS,
Walgreens Boots Alliance Inc.
WBA,
and Walmart Inc.
WMT,
were also named as defendants in the product-liability cases.
CVS Health declined to comment on the litigation, but said in a statement to MarketWatch that it remains “committed to offering products that are safe, work as intended, comply with regulations and satisfy customers.” Walgreens and Walmart did not immediately respond to requests for comment Tuesday.
Lawyers for the plaintiffs did not respond to requests for comment on the ruling.
The J.P. Morgan analysts on Monday added Kenvue shares to their focus list as a value pick, saying the court’s ruling would likely allow the stock’s valuation to move back in line with peers.
Kenvue shares have gained 4.4% over the past three months, while the S&P 500
SPX,
has gained 7.2%.
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