Mead Johnson rises after company says infant formula is safe
FILE PHOTO: ENFAMIL infant formula, made by Mead Johnson Nutrition Co., sits on display in a supermarket in New York in 2009.
BLOOMBERG NEWS FILE PHOTO DANIEL ACKER
By Alex Nussbaum Bloomberg News
WASHINGTON - Mead Johnson Nutrition Co., the world’s leading seller of children’s formula, jumped in early trading after the company said tests showed no bacteria in a batch of the product used by a baby who died.
Mead Johnson rose 5.7 percent to $69 at 8:21 a.m. New York time. The Glenview, Ill.-based company fell 15 percent from Dec. 22 to Dec. 23 after Wal-Mart Stores Inc. and other retailers pulled Enfamil Newborn formula from shelves.
The infant who died in Missouri was one of two who tested positive this month for the bacteria Cronobacter. Mead Johnson tested samples that matched those screened by U.S. regulators, using the same methods, the company said in a Dec. 25 statement. Results of tests by U.S. regulators are pending.
“Recent test results should absolve Mead Johnson of product safety concerns,” Edward Aaron, an RBC Capital Markets analyst in Denver, wrote in a note to clients today. While the potential for lower sales remains, “given the favorable outcome of recent tests, we would expect most of these losses to be recovered in short order.”
Wal-Mart, Kroger Co. and Walgreen Co. last week pulled a batch of the formula after the baby’s death was disclosed. The retailers didn’t respond to requests for comment yesterday. Chris Perille, a Mead Johnson spokesman, said the formula taken off the shelves probably won’t be made available for sale again until the FDA makes a final determination.
Lead Brand Franchise
The Enfa brands, which include Enfamil, accounted for 79 percent of Mead Johnson’s $3.14 billion in 2010 revenue and were the world’s lead brand franchise in pediatric nutrition based on retail sales, the company said in a February filing.
The U.S. Centers for Disease Control and Prevention in Atlanta has been working with state regulators and the Food and Drug Administration in testing in the Missouri case, said Robert Tauxe, deputy director of the CDC division charged with prevention of foodborne, waterborne, and fungal infection at the agency.
There is no evidence yet the two infections are related or caused by infant formula, Tauxe said in a telephone interview on Dec. 23. “This may just be coincidence,” he said.
Public health officials are gathering information on the two infants, checking to see if the bacteria in each have the same genetic fingerprint, he said. If they do, that may suggest they got the infection from the same source.
Results may be back by the end of this week, Tauxe said. The CDC is testing leftover formula, he said, and the FDA is testing unopened formula. An FDA spokeswoman, Siobhan Delancey, said Dec. 26 that her agency’s results are pending.