Reckitt Benckiser Shares Rise 10% Following Legal Victory in Infant Formula Case

Shares of Reckitt Benckiser, the parent company of Dettol, surged over 10% on Friday, November 1, following a favorable ruling in a pre-term formula trial. The stock price increased by 10.5% to £51.70, marking its highest level since March, according to Reuters.

The rise in share value comes after a jury cleared Reckitt’s subsidiary, Mead Johnson, and US-based Abbott Laboratories of liability concerning a young boy’s serious intestinal disease. The lawsuit alleged that the companies failed to adequately warn about the risks associated with premature baby formulas. In response to the verdict, Mead Johnson stated that the ruling “demonstrates that the claims in this case were not supported by the science or experts in the medical community.”

Abbott also commented on the outcome, affirming that the decision reinforces the safety of preterm infant nutrition products as supported by the medical community and regulatory bodies.

Despite this legal victory, Reckitt Benckiser faced challenges in its nutrition segment, with the company reporting supply shortages that impacted sales in the third quarter. For the year ending September 30, Reckitt’s net sales declined by 0.5% on a like-for-like basis, though there was a slight year-over-year increase of 0.4%.