Kenvue Shares Drop Below IPO Price Amidst Tylenol Lawsuit Concerns

Kenvue (ticker: KVUE) experienced a sharp decline of 6% in its shares on Thursday, causing them to fall below their initial public offering (IPO) price for the first time. This significant drop comes as investors express concerns about the company's potential exposure to lawsuits related to one of its key products, Tylenol.

The stock, now trading at $20.99, dropped $1.39 or 6.2%, below its IPO price of $22 from May. The trading volume was exceptionally high with 102 million shares exchanged, surpassing the 90-day average of 25 million shares.

Although there was no official announcement from the company on Thursday, insights from two Wall Street analysts revealed that the decline in Kenvue's stock can be attributed to worries about potential Tylenol litigation. Kenvue, originally a part of Johnson & Johnson, operates as a healthcare company and offers various products such as Band-Aid, Listerine, Neutrogena, and Tylenol.

Earlier this year, "source" highlighted fairly unnoticed lawsuits that allege the painkiller Tylenol might have contributed to neurological disorders in children whose mothers took the medicine during pregnancy. These lawsuits argue that the company should have provided a warning about the possible risks on the label of the product.

It remains to be seen how Kenvue will address these concerns arising from the Tylenol lawsuits and navigate the implications for its business in the near future.

Lawsuits and Procedural Victories

The lawsuits against Kenvue are currently in the early stages, but the plaintiffs have achieved a series of procedural victories in recent months, as reported by ’s. As we approach the fall, the lawsuits will enter a crucial phase wherein both parties will debate the admissibility of expert testimonies during the trial. If the judge approves the plaintiffs' experts, investors will need to pay closer attention.

The Safety of Acetaminophen

Kenvue argues that acetaminophen, the active ingredient in Tylenol, is one of the most extensively studied medications in history. Furthermore, U.S. health regulators and medical organizations concur that it is a safe pain reliever. The American College of Obstetricians and Gynecologists specifically asserts that acetaminophen is "one of the only safe pain relievers for pregnant individuals during pregnancy."

No Immediate Comment on Stock Movement

As of now, Kenvue has not provided any immediate comment on the stock movement that occurred on Thursday.

Talc-Related Litigation

Aside from the current lawsuits, Kenvue is also facing talc-related litigation regarding its product, Johnson's Baby Powder. However, its former parent company, Johnson & Johnson (JNJ), is assuming the talc legal risk in North America. Beyond North America, the general perception on Wall Street is that the talc risk for Kenvue is not significant.

Johnson & Johnson Completes Exchange Offer

Johnson & Johnson has successfully completed an exchange offer involving approximately 1.5 billion Kenvue shares for its own stock. As a result, 191 million J&J shares have been retired. Despite this exchange, J&J will continue to hold around 9.5% of the company, which went public in May.

Positive Stock Performance

On Thursday, J&J stock experienced a 1.3% increase, reaching a value of $160.