Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, is investigating potential claims against Abbott Laboratories (NYSE: ABT) on behalf of long-term stockholders following a class action complaint that was filed against Abbott on August 31, 2022 with a Class Period from February 19, 2021, to June 8, 2022. Our investigation concerns whether the board of directors of Abbott have breached their fiduciary duties to the company.
Abbott manufactures various forms of infant formula including formula sold under the brand names Similac, Alimentum, and EleCare. Prior to February 2022, Abbott had produced 40% of the United States’ infant formula. Of that amount, nearly half was produced in its manufacturing facility in Sturgis, MI.
On February 17, 2022, the US Food and Drug Administration (“FDA”) announced it was investigating four consumer complaints of infant illness related to powdered infant formula produced by Abbott Laboratories in Sturgis. The FDA stated that it had initiated an onsite inspection at the facility and to date had found several positive contamination results from environmental samples for a bacteria, Cronbacter sakazakii (“Cronbacter”), linked to infant illnesses and death. On the same day, Abbott issued a recall of certain infant formula products including the popular brands Similac, Alimentum, and EleCare, all manufactured in Sturgis.
On this news, the price of Abbott Laboratories common stock declined by more than 3%.
Then, on March 22, 2022, the FDA release reports from its three inspections of the Sturgis facility conducted in September 2019, September 2021, and most recently between January 31, 2022 and March 18, 2022. The FDA stated that these reports “do not constitute final FDA determinations” of specific violations, but highlighted that during its most recent inspection that (a) Abbott failed to establish process controls “designed to ensure that infant formula does not become adulterated due to the presence of microorganisms in the formula or in the processing environment” and (b) Abbott failed to “ensure that all surfaces that contacted infant formula were maintained to product infant formula from being contaminated by any source.”
On this news, Abbott’s stock price fell by an additional 4%.
On April 28, 2022, the FDA released a redacted copy of a whistleblower complaint sent to the FDA in October 2021, revealing that the issues disclosed in February and March 2022 were actually known to Abbott management far earlier. The whistleblower complaint identified numerous serious examples of misconduct by Abbott management at Sturgis including the falsification of testing records, the release of untested infant formula to the market, efforts to mislead the FDA during its 2019 inspection audit, the continuation of known deficient testing procedures, and an inability to trace products to properly implement recalls of affected pallets of formula.
On this news, Abbott Laboratories’ stock price fell nearly 4%.
Finally, on June 8, 2022, investors learned that Abbott was aware of the whistleblower’s formal allegations in early 2021, when it was reported that the FDA whistleblower had filed a complaint in February 2021 with the US Labor Department’s Occupational Safety & Health Administration (“OSHA”) and that OSHA delivered that complaint to Abbott and the FDA during the same month.
On this news, Abbott’s stock price fell by an additional 3.5%, further damaging investors.
The Abbot class action lawsuit alleges that defendants put profitability ahead of children’s safety. During the Class Period, Abbott Laboratories engaged in a scheme to maximize revenues and inflate its stock price while disregarding and then concealing lapses in safety protocols that were ultimately linked to serious infant illnesses and even deaths.
If you are a long-term stockholder of Abbott, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Melissa Fortunato by email at investigations@bespc.com, by telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York and California. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
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Contacts
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Melissa Fortunato, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com
