Reckitt rallies after Mead Johnson wins baby formula case

(Sharecast News) - Reckitt Benckiser shot to the top of the FTSE 100 on Tuesday after an Illinois court ruled in favour of its Mead Johnson unit in a trial alleging that its baby formula was linked to a deadly bowel disease in premature babies. In a statement on Monday, Mead Johnson said it welcomed the unanimous jury verdict in the company's favour in the Inman case in the US District Court for the Northern District of Illinois.

It was the first bellwether case against the business tried in the federal Multi-District Litigation (MDL) involving allegations concerning the cause of necrotizing enterocolitis (NEC), a serious gastrointestinal condition that primarily affects premature infants.

There are currently no outstanding jury verdicts in the overall NEC litigation against Mead Johnson.

"Today's verdict affirms Mead Johnson's view that the science doesn't support the claims here or in the litigation more broadly," it said. "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."

At 1035 BST, Reckitt shares were up 4.5% at 5,362p.

Russ Mould, investment director at AJ Bell, said: "This bellwether ruling removes a significant area of doubt surrounding the business which could help clear the way to a sale which Reckitt has been pursuing for some time.

"Any deal would bring to an end a damaging episode for Reckitt which bought Mead Johnson in 2017 and has been counting the costs for most of the intervening period."