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 Healthy Again” motion, or MAHA. An intraday stoop neared 15% at one level after the Journal‘s report before retreating, but roughly 9% has still been wiped off Kenvue’s market cap.
A refrain of Wall Road analysts beg to vary, reaffirming Kenvue’s basic resilience and seeing this as a possibility to purchase the dip. In notes distributed to purchasers Monday morning, companies equivalent to BofA Securities and Canaccord Genuity inspired buyers to view the sell-off as a shopping for alternative slightly than affirmation of a deep and lasting risk to Kenvue’s enterprise.
No proof, even a combined MAHA response
Canaccord analysts wrote the financial institution believes the authorized threat is minimal given {that a} mass tort lawsuit on related claims “was essentially shut down” in December 2023. The financial institution additionally famous an announcement from HHS that any claims about Kennedy’s report have been hypothesis. Calling the market sell-off a “major overreaction,” it added that it sees “no reputable study [that] has linked acetaminophen use to increased risk of [autism spectrum disorder].” The headline threat, if any, is dropping a small phase of customers slightly 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 help Kennedy’s MAHA motion. Mainstream channels finds no acceptance of those claims, whereas even “more fringe” sources produce “mixed sentiment” with indicating there may be nonetheless no proof, and others vocal about different seeming conspiracy theories, equivalent to that vaccines trigger autism—additionally unproven, the financial institution notes.
Analysts at BNP Paribas stated Friday proving a hyperlink to autism stays unlikely given prior rulings that Tylenol is secure, 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 suggestion. The FDA does advise pregnant ladies to verify with their medical doctors about utilizing it, although.
No smoking gun
Regardless of ongoing lawsuits, federal judges have up to now 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 circumstances.
Kenvue itself has forcefully denied any wrongdoing and highlighted the regulatory consensus. In an announcement to the BBC, the corporate stated, “We have continuously evaluated the science and continue to believe there is no causal link between acetaminophen use during pregnancy 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 presents an essential lesson in how medical controversies play out in public markets. Whereas headline threat might rattle shares, nuanced evaluation from analysts can rapidly restore perspective and, in some circumstances, spark restoration. Because it stands, Kenvue’s Tylenol saga seems to be extra noise than sign—no less than for now, in accordance 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.
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