Kenvue Stock Rebounds 6.01% After Trump Administration's Tylenol Warning

Kenvue, the manufacturer of Tylenol, experienced a significant rebound in its stock price on Tuesday, rising 6.01% to $17.99 in premarket trading. This recovery follows a notable decline of 7.47% the previous day, triggered by warnings from the Trump administration that the use of Tylenol during pregnancy could be linked to autism. The controversy surrounding Tylenol has led to a cumulative decline of over 25% in Kenvue's stock over the past six months.

Kenvue has consistently maintained the safety of Tylenol, emphasizing that independent and reliable scientific evidence shows that the use of acetaminophen, the primary ingredient in Tylenol, does not cause autism. According to estimates, Tylenol is one of Kenvue's best-selling products, contributing approximately 10% to the company's total revenue. The warnings from the Trump administration could potentially increase the number of lawsuits against Kenvue, alleging that prenatal exposure to Tylenol leads to autism.

Since its spin-off from Johnson & Johnson in 2023, Kenvue has faced around 500 lawsuits related to this issue. These lawsuits were dismissed in 2023 when a federal judge ruled that there was insufficient evidence to support the claim that Tylenol causes autism. Analysts from Citigroup have suggested that the warnings from the Trump administration pose limited legal risks to Kenvue, but the negative publicity could impact Tylenol's sales. While some early studies indicated a potential link between prenatal Tylenol use and autism, a comprehensive study conducted in 2024 analyzed data from nearly 2.5 million children in Sweden over a 25-year period and concluded that there was no association between the two.

In response to the controversy, the UK Health Secretary, Wes Streeting, advised British patients to disregard Donald Trump's call for pregnant women to avoid taking Tylenol, known as paracetamol in the UK. This public rebuke of a former U.S. president is a rare occurrence. The UK's Medicines and Healthcare products Regulatory Agency (MHRA) also warned that following Trump's advice could potentially harm unborn babies. In a statement, the MHRA asserted, "There is no evidence to suggest that taking paracetamol during pregnancy causes autism in children."

Streeting, as the chief spokesperson for the government's health policies, has faced political scrutiny, raising questions about his future prospects. He is considered a potential successor to the prime minister. The situation underscores the complex interplay between public health concerns and corporate responsibility, as Kenvue navigates the controversy while striving to maintain its market position. The recent rebound in Kenvue's stock price suggests that investors may be regaining confidence in the company's ability to address the allegations and continue its operations effectively.