Reckitt: Shares Deep in the Red After US Jury Orders Compensation in Baby Formula Lawsuit

Wide-moat Reckitt’s shares fell more than 15% in intraday trading March 15 after an Illinois jury ordered subsidiary Mead Johnson to pay $60 million in compensation to a mother whose premature baby died from necrotizing enterocolitis complications linked to consumption of the company's Enfamil infant formula. NEC is an intestinal inflammatory disease that primarily affects premature infants and can lead to death in advanced cases. According to Reuters, this trial is just the first out of potentially hundreds of similar lawsuits brought against Reckitt and Abbott, which produces Similac infant formula. This raises concerns that the total compensation that the company will be mandated to pay could end up substantially higher.