Shares in Reckitt Benckiser (LON: RKT), the consumer health and hygiene group behind Dettol, Nurofen and Enfamil infant formula, surged in London trading after its Mead Johnson unit was cleared by a federal jury of liability over a premature baby’s death.
The shares stood at 5,326p in Tuesday’s session, up 3.78% from Monday’s close of 5,132p, marking their highest level in weeks and pushing the stock back above its 50-day moving average of 5,076p, though still around 15% below their 52-week high of 6,253p.
A federal jury in the US District Court for the Northern District of Illinois returned a defence verdict for Mead Johnson on Monday in Inman v. Mead Johnson & Company, LLC, the first bellwether trial in a multi-district litigation, or MDL, grouping more than 825 lawsuits over claims that Enfamil’s premature-infant formula caused necrotizing enterocolitis, a severe bowel disease that can be fatal in premature babies. According to Alliance News, Reckitt said on Monday that there are currently no outstanding jury verdicts against it in the wider NEC litigation.
The bellwether result matters because it tests how future cases in the MDL might be resolved, and a defense win removes some of the legal overhang that has weighed on Reckitt’s shares for months. Plaintiffs’ co-lead counsel Sara Papantonio of Levin Papantonio said the trial was “a pivotal moment that brings the devastated families and premature babies affected by NEC a step closer to justice”, and argued Mead Johnson “has been aware for decades of the risks that cow’s-milk-based formulas pose to premature babies”.
The rally was reinforced, not created, by a same-day upgrade from JPMorgan, whose analyst Celine Pannuti moved Reckitt to “overweight” in a wider note on European consumer staples — so Tuesday’s move cannot be attributed to the court ruling alone.
Hundreds of further NEC cases remain pending against Mead Johnson in the MDL and in state courts, leaving Reckitt’s broader litigation exposure only partly reduced by Monday’s verdict.