Reckitt Benckiser welcomes Mead Johnson infant formula trial verdict
Reckitt Benckiser Group PLC on Monday said there are currently no outstanding jury verdicts in the overall necrotizing enterocolitis litigation against baby formula division Mead Johnson, after a favourable verdict in a case in Illinois.
The Slough, England-based consumer goods firm commented after a jury in the US District Court for the Northern District of Illinois voted unanimously in the company's favour in the Inman case.
This was a 'bellwether' trial among a group of cases alleging that formula for premature babies is linked to a dangerous bowel disease, NEC, a serious gastrintestinal condition that primarily affects premature infants.
In response, shares in Reckitt Benckiser were up 4.4% to 5,358.00 pence each in London on Tuesday morning, the best performer in the FTSE 100 index, which was down 1.2%. The stock also received support from an upgrade by JP Morgan to 'overweight' from 'neutral'.
In a statement, Reckitt Benckiser said the verdict "affirms Mead Johnson's view that the science doesn't support the claims here or in the litigation more broadly.
"We strongly reject any assertion that any of our products cause NEC, and we will continue to vigorously defend ourselves against all such claims in the interest of safeguarding the health of premature babies."
AJ Bell Investment Director Russ Mould said the ruling "removes a significant area of doubt surrounding the business which could help clear the way to a sale [of Mead Johnson] which Reckitt has been pursuing for some time".
Reckitt bought Mead Johnson, a manufacturer of baby milk formula, in 2017 for USD17.9 billion, including debt. The unit has been hit by impairments and US lawsuits in recent years.
In April, La Lettre reported that France's Danone SA was considering buying the business.
Reckitt is currently selling non-core assets to boost profitable growth. Last year, it sold its Essential Home business, which includes Cillit Bang and Air Wick, to private equity firm Advent International LP for USD4.8 billion.
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