Recasts with possible fallout; adds Kenvue comment, oral argument details, paragraphs 6-7, 9-10, stock price, paragraph 3

By Diana Novak Jones

CHICAGO, Nov 17 (Reuters) - Kenvue KVUE.N could face the revival of more than 500 private lawsuits alleging its Tylenol painkiller causes autism, after a U.S. appeals court panel on Monday questioned whether they were dismissed because a trial judge improperly excluded evidence.

U.S. District Judge Denise Cote dismissed the lawsuits last December, after criticizing the methodology of expert witnesses offered by parents who said use of Tylenol or its active ingredient acetaminophen during pregnancy caused their children to develop autism or attention deficit hyperactivity disorder.

Kenvue shares fell as two judges on a three-judge panel of the 2nd U.S. Circuit Court of Appeals in Manhattan suggested during a hearing that some of the testimony might have been admissible. They closed down 42 cents, or 2.5%, at $16.24.

Monday's hearing came nearly two months after President Donald Trump and his top health officials suggested a link between autism and Tylenol use during pregnancy.

There is no firm evidence of such a link. Medical groups, including the American Academy of Pediatrics and the American College of Obstetricians and Gynecologists have said acetaminophen is the recommended first-line medication for pain and fever during pregnancy, but should be taken at the lowest possible dose.

Kenvue has long maintained that Tylenol is safe and does not cause autism. "The science has not changed," a Kenvue spokesperson said after the hearing.

Cote had said the proposed expert testimony "obscured the complexities, inconsistencies, and weaknesses in the underlying data."

But at Monday's hearing, Circuit Judge Gerard Lynch said the plaintiffs' primary expert, Harvard School of Public Health Dean Andrea Baccarelli, appeared to be "explaining at every step of the way what he is doing. Even if some would disagree with each or every step he takes."

Circuit Judge Guido Calabresi suggested that perhaps a jury could have sorted it out.

"All that matters is that people bring in evidence so that then juries or courts, this goes one way or another," Calabresi told Kenvue's lawyer.

The appeals court did not say when it will rule.

IMPACT ON KIMBERLY-CLARK DEAL UNCLEAR

It is unclear how reviving the lawsuits might affect Kimberly-Clark's KMB.O plan to pay more than $40 billion to buy Kenvue, formerly part of Johnson & Johnson JNJ.N.

Kimberly-Clark and Kenvue told U.S. regulators that any "condition, development or occurrence" related to the alleged link between Tylenol's use in pregnancy and autism and ADHD would not be a reason for Kimberly-Clark to back out. The companies plan to close the deal in 2026.

Kenvue has also defended against a lawsuit by Texas Attorney General Ken Paxton over Tylenol.

On Friday, a Texas judge declined Paxton's request to block Kenvue from paying a $398 million shareholder dividend this month, and require Kenvue to change its marketing.

(Reporting by Diana Novak Jones; Editing by Amy Stevens, Lisa Shumaker and Bill Berkrot)

((diana.jones2@thomsonreuters.com; 720-206-9604))