• Kenvue's shares declined 2.5% on Monday, after an indication from a U.S. court of appeals that past cases linking Kenvue's Tylenol to autism could be revived.
• Two months ago, President Donald Trump and his top health officials suggested that the use of Tylenol during pregnancy heightens the risk of autism in children.
• Earlier this month, Kimberly-Clark announced an over $40 billion deal to acquire Kenvue.

Kenvue, Inc.'s shares declined 2.5% on Monday, marking their worst session this month, after a U.S. appeals court panel suggested that private lawsuits linking Kenvue's Tylenol painkiller to autism could be revived.

U.S. District Judge Denise Cote dismissed the lawsuits last December, after criticizing the methodology of expert witnesses. Hearing an appeal from the plaintiffs, two judges from a panel of three of the 2nd U.S. Circuit Court of Appeals in Manhattan suggested that some of the testimony might have been admissible. While the panel did not rule in the case, the development suggests that some 500 private lawsuits against Kenvue could be revived.

The potential legal challenge would present a major hurdle for Kenvue; just two months ago, President Donald Trump and his top health officials suggested that the use of Tylenol during pregnancy heightens the risk of autism in children. Kenvue has long maintained that Tylenol is safe and does not cause autism.

It could also complicate Kenvue's over $40 billion buyout by Kimberly-Clark. The Band-Aid maker announced the deal earlier this month, despite the Tylenol issue, but analysts have been divided. Morgan Stanley analysts flagged“a large degree of execution risk” in their recent investor note.

On Stocktwits, the retail sentiment for KVUE and KMB remained 'bearish,' unchanged over the past seven days, with a fair share of users appearing bullish for the company and the Kimberly-Clark deal.

“LMAO. That escalated quickly. I'll buy more in the low 15s if possible,” joked one user.

Retail investors remain unsure of the autism claims.“Two things: the 2nd appeals court in the northeast, RFK Jr publicly came out and said that there is no link between Tylenol and autism (day after Texas lawsuit),” said a user, referring to the comments made by Health Secretary Robert F. Kennedy Jr.

“It appears these people are trying to use Trump and RFK Jr linking it in their appeal. Not sure that will fly after RFK Jr. backtracks. Also, RFK Jr linked circumcision to Autism after the Tylenol announcement. Let's not forget that he has spent years saying that vaccines caused autism,” this person said.

Since the deal announcement on November 3, KVUE shares have gained approximately 13%, while KMB shares have declined by the same percentage. 

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