By Mackenzie Tatananni

Kenvue is already in the hot seat as the Trump administration targets Tylenol, one of its best-known brands, but now it's under pressure for a different reason.

A lawsuit filed Tuesday at the U.K. High Court represents more than 3,000 people who allege Johnson & Johnson, which spun off Kenvue in 2023, knowingly sold baby powder that was contaminated with asbestos, a carcinogen. The lawsuit targets both Johnson & Johnson and Kenvue UK Ltd., a subsidiary.

Kenvue stock plunged on Thursday after Citi Research published a research note highlighting the financial implications for Kenvue itself.

The complainants allege that their use of the baby powder caused diseases such as ovarian cancer and mesothelioma, a type of cancer that develops in the lining of internal organs, between 1965 and 2023.

Shares of Kenvue were down 10% to $14.60 in afternoon trading, on pace for a record closing low, according to Dow Jones Market Data. The news didn't appear to hit Johnson & Johnson, which rose slightly. The S&P 500 was down 0.5%.

Johnson & Johnson said in a statement that Kenvue "retained the responsibility and any purported liability for talc-related litigation outside of the US and Canada."

In its own statement, Kenvue denied the allegations raised in the suit and indicated the baby powder "did not contain asbestos, and does not cause cancer."

The lawsuit mirrors various others in the U.S., "for which J&J has been ordered to pay billions in verdicts, although J&J has successfully appealed some verdicts," the Citi analysts noted.

Johnson & Johnson has attempted to shield itself by transferring liabilities related to its baby powders to a subsidiary and having that subsidiary file for bankruptcy. These attempts have repeatedly been rejected in federal court.

Last week, Johnson & Johnson was ordered to pay $966 million to the family of a woman who died from mesothelioma. The healthcare company still faces tens of thousands of U.S. lawsuits.

"Our understanding is that damages awarded by courts in the UK are generally limited to compensation for losses caused by a defendant's actions, whereas the majority of the awards to defendants in the US lawsuits were for punitive damages against J&J," the Citi analysts wrote.

While the potential liability for the U.K. lawsuit is unknown, "we are cautious about the financial implications for Kenvue given the legal precedent from the US cases against J&J," the bank said.

Kenvue's name has been in the news due to Trump's attacks on Tylenol, one of the most common over-the-counter medicines in the U.S. The stock plummeted in September after the White House linked childhood autism to use of the drug during pregnancy.

Kenvue has said in the past it has studied the science and hasn't found any causal link between the use of Tylenol in pregnancy and autism.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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October 16, 2025 14:39 ET (18:39 GMT)

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