Kenvue
shares fell 6% Thursday, dropping below their IPO price for the first time amid apparent investor concerns about the company’s exposure to lawsuits over one of its key products, Tylenol.
Kenvue (ticker: KVUE) was down $1.39, or 6.2%, to $20.99, below its initial public offering price of $22 in May. Volume was very heavy at 102 million shares, against a 90-day average of 25 million shares.
There was no news from the company Thursday, but two Wall Street analysts told Barron’s that concerns over Tylenol litigation were behind the stock’s drop. Kenvue is a healthcare company that was formerly part of
Johnson & Johnson.
It sells such products as Band-Aid, Listerine, Neutrogena, and Tylenol.
As Barron’s reported in August, little-noticed lawsuits claim the painkiller Tylenol “caused neurological disorders in children whose mothers took the medicine while pregnant. They say that the company is at fault for not including a warning about the possible risks on the bottle’s label.”
The lawsuits are at an early stage, but the plaintiffs have won a series of procedural victories in recent months, Barron’s reported. This fall, the lawsuits will enter a decisive phase, as the sides argue over which experts will be allowed to testify at trial. If the judge approves the plaintiffs’ experts, investors will need to start paying more attention.
Kenvue has said acetaminophen, the active ingredient in Tylenol, is one of the most studied medications in history, and that U.S. health regulators and medical organizations agree it is safe. The American College of Obstetricians and Gynecologists calls acetaminophen “one of the only safe pain relievers for pregnant individuals during pregnancy.”
Kenvue had no immediate comment on the stock movement Thursday.
Kenvue faces talc-related litigation over another product, Johnson’s Baby Powder, but its former parent Johnson & Johnson (JNJ) is absorbing the talc legal risk in North America and the risk outside the U.S. for talc generally is viewed as not significant on Wall Street.
Johnson & Johnson recently completed an exchange offer in which it swapped about 1.5 billion Kenvue shares for its own stock, retiring 191 million J&J shares. J&J will continue to hold about 9.5% of the company after taking it public in May. J&J stock was up 1.3% to $160 on Thursday.
Write to Andrew Bary at [email protected]
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