Enfamil maker vows to fight $60 million baby-formula verdict as stock slides

By Claudia Assis

Reckitt said it 'stands behind' its Mead Johnson baby formula

Reckitt Beckinser Group said Friday it will seek to overturn a court ruling this week that awarded $60 million in damages to the family of a baby that died after being fed Enfamil infant formula, made by the British conglomerate's Mead Johnson Nutrition unit.

U.S.-listed shares of Reckitt (UK:RKT) (RBGLY) fell 14% on Friday, while shares of Abbott Laboratories (ABT) dropped more than 5%. Abbott, too, is involved in litigation regarding its Similac brand of baby formula.

A nationwide baby-formula shortage sent parents scrambling in 2022, mostly because of product recalls earlier that year involving contamination concerns at an Abbott plant.

In a statement Friday, Reckitt said it stood by "the safety of our products" and that it rejected court findings that its product caused a serious gastrointestinal problem in the baby.

"It is important to note that this is a single verdict in a single case and should not be extrapolated," the company said. "We are, of course, surprised and deeply disappointed with the verdict and will pursue all options to have it overturned."

Thousands of baby-formula-related lawsuits are making their way through the courts currently. In a February filing, Abbott said that it is a defendant in 993 lawsuits pending in federal and state courts relating to preterm babies being fed cow's-milk-based formulas. Some cases also stem from the alleged contamination at Abbott's plant.

The U.S. Food and Drug Administration in August sent warning letters to three baby-formula makers as part of what the agency called enhanced oversight of the product following the 2022 recalls and shortages.

Reckitt's American depositary receipts have lost 18% in the past 12 months, while Abbott shares have gained 16% over the same period. That compares with an advance of around 32% for the S&P 500 index SPX in the last 12 months.

-Claudia Assis

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03-15-24 1540ET

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