Abbott, FDA enter deal over reopening of baby formula facility in Michigan

Abbott Laboratories said on Monday it had reached an agreement with the U.S. health regulator to resume production of baby formula at its troubled Michigan plant, marking a major step towards resolving a nationwide shortage of the product. The company said once the U.S. Food and Drug Administration confirms that the initial requirements have been met, the site could be restarted within two weeks.

Abbott Laboratories said on Monday it had reached an agreement with the U.S. health regulator to resume production of baby formula at its troubled Michigan plant, marking a major step towards resolving a nationwide shortage of the product.

The company said once the U.S. Food and Drug Administration confirms that the initial requirements have been met, the site could be restarted within two weeks. "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 Officer Robert Ford said.

The FDA began looking into the facility after complaints about bacterial infections in infants who had consumed the products. Abbott, the biggest U.S. supplier of milk formula, in February recalled Similac and other baby formula made at the Michigan facility. That has driven a shortage across the country, forcing many leading retailers to limit purchases.

Abbott said it has been working on corrective actions since the FDA inspection and submitted a response and corrective action plan to the regulator on April 8. The agreement between Abbott and the FDA, called a consent decree, is subject to court approval.

The company said it would incur one-time specified charges for expenses related to the consent decree, which have not yet been quantified. However, Abbott reiterated its 2022 adjusted profit forecast of at least $4.70 per share.

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