Abbott Laboratories shares jumped Friday after the Club holding picked up a surprise victory in a trial over the safety of its formula for premature babies. The news Abbott Labs' specialized formula is not responsible for a young baby boy developing a severe intestinal illness known as necrotizing enterocolitis, or NEC, a jury in Missouri state court found Thursday night —wrapping up a roughly five-week trial closely watched by investors. The jury also cleared Mead Johnson, a subsidiary of Reckitt Benckiser , and St.
Louis Children's Hospital from liability in the case. Plaintiffs had argued that Abbott and Mead Johnson's formulas — used to treat premature babies in neonatal intensive care units — raised the risk of developing NEC, and that the companies did not properly disclose that risk. For their part, Abbott and Mead Johnson strongly deny the allegations and defend the products as medically necessary treatments for babies in certain instances when breast milk cannot be used.
"We are pleased with the jury's decision," Abbott spokesperson Scott Stoffel said in a statement to CNBC on Friday morning. "The decision reinforces what we, the medical community and regulatory bodies have said: that preterm infant nutrition products are safe, and there is no reliable scientific evidence that they cause or contribute to cause NEC. Abbott stands by the vital role its preterm infant formula and human milk fortifiers serve in the hospital in nourishing premature babies.
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