Reckitt Chief Defends Safety of Baby Formula, Will Fight Verdict

Reckitt Benckiser Group Plc’s chief executive officer vowed to fight to overturn a verdict that blamed one of the company’s Enfamil formulas for the death of a premature baby.

Enfamil Premature 24 “is safe and critical and we have no plans to stop providing the product,” CEO Kris Licht told analysts on a conference call Monday. “We are confident that this was an incorrect verdict and we will do everything we can to overturn it.”

Jurors last week awarded an Illinois woman, Jasmine Watson, $60 million in damages, saying the UK consumer-goods company’s Mead Johnson Nutrition unit failed to warn her about the risk of a life-threatening disease called necrotizing enterocolitis from its cow-milk formula.

The decision sent Reckitt’s stock to its lowest level in 10 years on Friday, erasing about £5.4 billion ($6.9 billion) in market value. The shares recovered on Monday, but they are still down about 13% since Thursday’s close.

Enfamil products “provide life-saving nutrition for premature babies under the guidance of medical professionals,” Licht told analysts.

The maximum liability for the company could be as high as £3.3 billion, according to Tom Sykes, an analyst at Deutsche Bank.

The case was the first of its kind to go to trial in the US. The verdict has alarmed investors who have watched other companies get embroiled in drawn-out and costly US product liability litigation. Shares of Abbott Laboratories, another maker of infant formula, closed 2.8% lower on Friday after the ruling.