Background: Kenvue’s $4.2 Billion IPO and the FDA’s Phenylephrine Ruling
At the heart of the case is Kenvue’s 2023 IPO, through which it raised $4.2 billion in an exchange offer allowing Johnson & Johnson shareholders to swap their stock for Kenvue shares at a discount. But investors later alleged they were misled — claiming the offering documents omitted material facts about an ongoing FDA regulatory review that could determine phenylephrine’s effectiveness.
That meeting before the Nonprescription Drug Advisory Committee (NDAC), held just months after the IPO, resulted in an FDA vote declaring phenylephrine ineffective when taken orally, contradicting years of corporate claims.
According to the class action, Johnson & Johnson and Kenvue failed to warn investors about the risk of this outcome and misled them by promoting the drug as safe and effective while knowing that internal and independent studies suggested otherwise.
J&J and Kenvue’s Push for Appeal Denied
In addition to seeking reconsideration, the companies had asked the court to certify three issues for interlocutory appeal, including whether companies must disclose every contrary scientific study when offering opinions on a product’s safety or efficacy.
Judge Quraishi rejected that too, calling the request a “mischaracterization of the court’s prior ruling.” He clarified that the decision did not require disclosure of all studies but found that omitting specific, significant evidence of phenylephrine’s ineffectiveness was materially misleading.
“Their disagreement with the court’s application of the materiality standard does not meet the threshold for appeal,” the judge wrote, firmly shutting the door on the companies’ procedural escape route.
