NORTH CHICAGO, ILLINOIS – Abbott Laboratories saw a decline in its stock price on Friday following a jury verdict in an Illinois state court. The jury ordered rival company Reckitt Benckiser’s Mead Johnson unit to pay $60 million over allegations that a premature child died after consuming the company’s Enfamil baby formula.
This verdict represents the first trial outcome among the hundreds of lawsuits filed against both Reckitt Benckiser and Abbott, all claiming that their baby formulas caused a gastrointestinal disease called necrotizing enterocolitis (NEC) in children.
Abbott’s stock dropped approximately 4% after the news, marking the largest intraday decline in over five months. The company saw a higher trading volume, with around 6.8 million shares exchanged compared to the average of 5.0 million over the past 65 days.
“This verdict confirms what Mead Johnson has known for years: cow’s-milk based baby formula causes NEC in preterm infants, often with fatal consequences,” stated Ben Whiting, a lawyer representing plaintiff Jasmine Watson.
Mead Johnson expressed disappointment with the jury’s decision and announced plans to appeal. However, the parent company, Reckitt Benckiser, saw an 18% decrease in its U.K.-listed shares upon hearing the news.
For Abbott, this verdict adds to the legal challenges already faced by baby formula manufacturers in the United States. The healthcare giant, based in North Chicago, Illinois, is currently grappling with multiple lawsuits due to its recall of certain baby formula brands in 2022 over contamination concerns, which resulted in a nationwide shortage.
Overall, this development serves as a setback for both Reckitt Benckiser and Abbott, highlighting the ongoing legal battles in the baby formula industry. As the lawsuit proceedings continue, the outcomes of future trials will be closely monitored by stakeholders and consumers alike.