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Update 9:05pm: Adds Kenvue comment.
Kenvue (NYSE:KVUE) rose 5% in after hours trading after a court ruled in it favor in a class action lawsuit alleging prenatal exposure to Tylenol may contribute to autism or attention-deficit hyperactivity disorder.
Kenvue’s motion to to exclude plaintiffs’ general causation experts’ opinions regarding Autism Spectrum Disorder, Attention Deficit Hyperactivity Disorder, and biological plausibility aregranted, U.S. District Judge Denis L. Cote ruled on Monday.
“With these rulings, the plaintiffs do not have admissible evidence to demonstrate that prenatal exposure to acetaminophen causes either ASD or ADHD in offspring,” Judge Cote wrote. “The Court denies as moot plaintiffs’ motions to preclude the testimony of defendants’ experts. ”
Kenvue (KVUE) plans to seek dismissal of the lawsuits, according to a statement emailed to Seeking Alpha.
“There is the potential for unfortunate, real, and long-term public health consequences in allowing scientific guesswork in courtrooms to inform medical decision-making,” Kenvue said in the statement. “Healthcare professionals – not lawyers – are best positioned to advise their patients on whether taking acetaminophen is appropriate based on their unique medical conditions.”
Kenvue shares jumped 7% on Dec. 7 after a hearing to determine whether the plaintiffs had enough expert evidence to prove their claims and to determine the admissibility of the evidence.
“Many experts have commented that the science behind the claims are weak and today’s testimony echoes those thoughts,” Canaccord analyst Susan Anderson, who has a buy rating and a $27 price target on the stock, worte in a note at the time.
Anderson wrote that Kenvue (KVUE) stock could move toward $23–$25 a share if the plaintiff’s general causation expert witnesses are dismissed.
“The court’s ruling aligns with the position of the U.S. Food and Drug Administration (FDA) and leading medical organizations that have thoroughly evaluated this matter – the science does not support causation,” We plan to move to dismiss these lawsuits 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. Healthcare professionals – not lawyers – are best positioned to advise their patients on whether taking acetaminophen is appropriate based on their unique medical conditions.”
The parties are expected to meet and confer as to next steps in the litigation and file a joint status letter by Jan. 12, according to a court filing on Monday.
Kenvue (KVUE) shares had dropped 12% through Dec. 6, the day before the Daubert hearing, since the company was spun off from JNJ in early May, at least partly due to investor concerns about the overhang from the tylenol potential litigation liability
Canaccord’s Anderson wrote that she had previously thought the worst-case scenario for Kenvue (KVUE) would be a settlement in the range of $6–8 billion, with KVUE taking $3–4 billion and the retailers taking the rest.
JPMorgan estimated in October that the market is embedding a potential liability tied to acetaminophen litigation in the range of around $10 billion.
Other defendants in the case include CVS Health (CVS), Walmart (WMT), and Walgreens Boots (WBA).