This week, Kenvue, the buyer 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 droop 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 chance to purchase the dip. In notes distributed to purchasers Monday morning, corporations resembling BofA Securities and Canaccord Genuity inspired buyers to view the sell-off as a shopping for alternative quite than affirmation of a deep and lasting menace to Kenvue’s enterprise.
No proof, even a blended MAHA response
Canaccord analysts wrote the financial institution believes the authorized threat is minimal given {that a} mass tort lawsuit on related claims “was primarily 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 threat of [autism spectrum disorder].” The headline threat, if any, is shedding a small phase of customers quite 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 “blended sentiment” with indicating there may be nonetheless no proof, and others vocal about different seeming conspiracy theories, resembling 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 girls to examine with their medical doctors 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, “We have now constantly evaluated the science and proceed to imagine there isn’t any 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 presents an vital lesson in how medical controversies play out in public markets. Whereas headline threat 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 response to 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.
