Reckitt to challenge $60 million baby formula verdict, shares sink
(Reuters) -Reckitt Benckiser said on Friday it would pursue all options to have a $60 million verdict overturned in a lawsuit related to its Enfamil baby formula in the United States as it stood by the safety of all its products.
London-listed shares of the consumer goods giant dropped more than 15% to their lowest in a decade, as the verdict triggered fears that Reckitt would face more financial liabilities from lawsuits related to the baby formula.
An Illinois jury ordered Reckitt unit Mead Johnson on Wednesday to pay $60 million to the mother of a premature baby who died of an intestinal disease after being fed Enfamil.
"We strongly disagree with the jury's decision to fault Mead Johnson and award damages," Reckitt said in a statement on Friday.
"The allegations from the plaintiff's lawyers in this case were not supported by the science or experts in the medical community."
It was the first verdict in hundreds of pending lawsuits claiming Enfamil and Abbott Laboratories' Similac formulas caused a fatal disease, mostly affecting premature newborns.
Both Reckitt and Abbott have denied the allegations.
"It's not simply the size of this payout which has caused nervousness, but the fact a long line of other lawsuits are pending, which could mount up to be (a) huge sum for Reckitt," Hargreaves Lansdown analyst Susannah Streeter said.
Shares of the company, which owns brands such as Lysol, Dettol and Strepsils, were last down to 4,361 pence at 1615 GMT - the steepest one-day drop since 1999, making them the top loser on London's blue-chip FTSE 100 index.
They last dropped close to similar levels on Feb. 28, when the company posted disappointing results and said an investigation showed some employees had under-reported liabilities in the Middle East.
(Reporting by Eva Mathews, Richard Rohan Francis and Pushkala Aripaka in Bengaluru; Editing by Anil D'Silva and Shinjini Ganguli)
