Baby Formula Makers Abbott and Reckitt See Stocks Slide as Judge Allows Retrial

Abbott Laboratories (ABT) shares declined and Reckitt Benckiser shares ended the day lower in London after Reckitt said a state judge ruled plaintiffs could seek a retrial against the infant formula makers.

In October, a jury in Missouri cleared Abbott and Reckitt of liability in a case alleging their infant formula products caused necrotizing enterocolitis (NEC), a disease of the bowels. Abbott manufactures Similac brand formula, and Reckitt owns Mead Johnson. 

“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 correct. It was consistent with the consensus of scientists, governmental regulators, and the neonatologists who treat these vulnerable patients,” a spokesperson for Abbott stated to Investopedia Friday.

“We plan to file an immediate appeal, and we expect that the jury’s verdict will be reinstated,” said Abbott.

Reckitt said the judge’s decision to allow plaintiffs to seek a new trial is “at complete odds with the law and the facts,” in a statement on its website. The company also expressed its intent to appeal. 

The development follows similar cases that brought rulings against the companies earlier in 2024. 

Shares of Abbott slid 2.4% Friday in the U.S., and Reckitt shares closed about 2% lower on the London Stock Exchange.