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: Abbott, FDA reach deal to resume making baby formula at U.S. plant amid shortage


Abbott Laboratories and the Food and Drug Administration reached a deal Monday to restart production of baby formula at a U.S. plant that has been shut down amid a recall of the product, which contributed to a nationwide shortage of formula.


announced Monday afternoon that the company had signed a consent decree with the FDA that details the steps necessary to resume production at the Sturgis, Mich., plant. Once the FDA confirms that Abbott has taken the initial steps outlined, the company expects to have the plant up and running in about two weeks, and formula should hit store shelves in six to eight weeks once the plant is up and running, according to Monday’s announcement.

Abbott voluntarily recalled powder formulas that included Alimentum, EleCare, and Similac in February because of potential contamination with an environmental bacteria called Cronobacter sakazakii. Two babies died and two more got sick after having been fed formula produced at the Sturgis plant.

“After a thorough investigation by FDA, Centers for Disease Control and Prevention (CDC) and Abbottt, and review of all available data, there is no conclusive evidence to link Abbottt’s formulas to these infant illnesses,” Abbott stated in the news release.

For more: As a baby formula shortage worsens, Abbottt says it can get some product back on store shelves in July

The recall set off a shortage of baby formula around the U.S. The CDC told parents not to feed babies with the Similac, Alimentum, or EleCare powdered infant formulas. Some parents took to rationing formula, watering it down, or trying to make their own, according to media reports

“Our No. 1 priority is getting infants and families the high-quality formulas they need, and this is a major step toward re-opening our Sturgis facility so we can ease the nationwide formula shortage. We look forward to working with the FDA to quickly and safely re-open the facility,” Abbott Chief Executive Robert B. Ford said in a statement. “We know millions of parents and caregivers depend on us and we’re deeply sorry that our voluntary recall worsened the nationwide formula shortage. We will work hard to re-earn the trust that moms, dads and caregivers have placed in our formulas for more than 50 years.”

Abbott executives restated their guidance for adjusted earnings for the year along with the news. While they did say the company would face one-time charges related to the consent decree, they do not believe those charges will be material.

Abbott shares have taken a hit this year, along with revenue from its formula business. The stock has declined 22.1% so far this year, as the S&P 500 index

has dropped 15.6%; Abbott shares gained about 0.2% in after-hours trading Monday following the announcement.

MarketWatch staff writer Jaimy Lee contributed to this article.

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