Abbott Laboratories (NYSE:ABT) on Friday reached a significant agreement with three law firms to resolve the Gill lawsuit alongside claims from roughly 2,000 individuals.
These disputes center around the company’s specialty infant formulas for premature babies and allegations connecting the products to necrotizing enterocolitis (NEC), a severe inflammatory intestinal disease affecting underdeveloped infants.
In July 2024, a St. Louis jury delivered a $495 million verdict against the health care company in the Gill trial.
After a Missouri Court of Appeals denied the resulting December 2024 appeal, the company faced approximately $600 million in damages and accrued interest.
Rather than pursuing further appeals, the manufacturer chose to settle the primary lawsuit and the additional 2,000 NEC claims for an aggregate amount of $670 million.
Maintaining Safety Claims Amid Continuing Litigation
The manufacturer emphasized that this compromise does not constitute an admission of fault. Executives continue to defend the safety of their preterm infant formulas.
Major health organizations, including the Food and Drug Administration and the Centers for Disease Control and Prevention, maintain that these necessary medical products lack reliable scientific links to NEC.
This sweeping agreement follows several recent legal victories for formula makers.
In July 2026, a federal appellate court upheld a pretrial judgment favoring the company. Similarly, courts in Illinois and Florida recently dismissed claims or reversed a $60 million verdict against competitor Mead Johnson, utilizing the learned intermediary doctrine regarding a manufacturer’s duty to warn.
While leaders believe this settlement serves the company’s best long-term interests, roughly 1,700 lawsuits representing about 12,700 infants remain pending.
The manufacturer actively seeks to eliminate many remaining cases, noting that numerous claims feature overlapping jurisdictions, lack NEC diagnoses, or fail to specify which company’s formula hospitals administered.
Abbott Analyst View
William Blair notes 1,700 lawsuits covering 12,700 individual infants remaining, and analyst Brandon Vazquez expects the settlement of the Gill case can provide precedent for Abbott to move forward on settling
the remaining outstanding lawsuits, though timing remains uncertain.
Analyst Vazquez said, “We expect Abbott will ultimately end up with outstanding exposure to something less than the total 12,700 remaining cases. Abbott noted it still needs to verify things like which infants had Abbott formula (instead of Mead formula) or which cases of NEC were diagnosed before they had formula, among other things.”
ABT Stock Price Activity: Abbott Laboratories shares were down 0.12% at $114.00 during premarket trading on Friday,
according to Benzinga Pro data.
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