Jury Clears Abbott and Reckitt in Premature Baby Formula Lawsuit

Abbott and Mead Johnson, a Reckitt unit, are not liable for causing a young boy's intestinal disease, ruled a St. Louis jury. The lawsuit alleged their baby formulas led to the illness. The verdict led to stock price surges for both companies, as it alleviated concerns over potential liabilities.

A jury in St. Louis has cleared Abbott and Reckitt unit Mead Johnson of liability in a lawsuit regarding their premature baby formulas. The case involved a young boy who developed a debilitating intestinal disease, allegedly after consuming the formulas. This ruling provides a significant win for both companies, alleviating financial concerns following previous losses in similar cases.

Following the verdict, Reckitt experienced a notable stock uptick, rising 10% in early trading on Friday, while Abbott shares increased by 5.4% in after-hours U.S. trading. Analysts believe the reduced probability of hefty payouts positively impacted these movements. The plaintiffs were seeking over $6.2 billion in damages, arguing that the formulas endangered preterm infants.

With this case being one of about 1,000 similar lawsuits, tension remains in the medical community regarding the implications on formula availability and hospital feeding practices. Despite the ruling, Abbott and Mead Johnson maintain that the formulas are safe and do not cause necrotizing enterocolitis, backed by U.S. regulatory agencies and scientific reviews.

(With inputs from agencies.)