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Takeaways
- The stocks of infant formula manufacturers Abbott and Reckitt declined Friday after a ruling by a judge that plaintiffs may pursue a new case against the companies.
- A jury found in October that the companies were not liable for a case in which they claimed their infant formulas caused necrotizing Enterocolitis, an intestinal disease.
- Abbott and Reckitt both said they intend to appeal the judge's ruling.
Abbott Laboratories shares fell and Reckitt Benckiser ended the day lower after Reckitt announced that a state court ruled plaintiffs can seek a retrial.
In Missouri, in October, a Missouri Jury cleared Abbott and Reckitt from liability in an allegation that their infant formula products were responsible for necrotizing enterocolitis. Reckitt is the owner of Mead Johnson and Abbott manufactures Similac.
“Twelve citizens of the City of St. Louis served on a jury for five weeks, heard all the evidence, including from leading experts, and unanimously found that Abbott's formula does not cause NEC. Their verdict was right. It was consistent with the consensus reached by scientists, governmental regulatory agencies, and neonatologists who care for these vulnerable patients,” a Abbott spokesperson told Investopedia, Friday.
“We plan to file an immediate appeal, and we expect that the jury's verdict will be reinstated,” said Abbott.
Reckitt’s statement on its website said that the judge’s decision to allow plaintiffs a second trial is “completely in conflict with the facts and the law.” The company has also stated its intention to appeal.
The rulings were based on similar cases which occurred earlier in 2024.
The shares of Abbott fell 2.4% on Friday in the U.S. and Reckitt shares ended about 2% lower at the London Stock Exchange.
