Legal Win Boosts Abbott's Stock 0.26 as $790M Volume Ranks 140th in U.S. Equities

Market Snapshot

Abbott Laboratories (ABT) closed on October 27, 2025, with a 0.26% increase in share price, reflecting modest gains in a mixed market. The stock traded with a volume of $0.79 billion, ranking 140th among U.S. equities in terms of trading activity. While the price movement was relatively muted, the elevated trading volume suggests heightened investor interest, potentially linked to recent developments in the company’s legal battles.

Key Drivers

Abbott’s recent legal victory in a high-profile multidistrict litigation (MDL) case over its Similac Special Care 24 (SSC-24) infant formula has emerged as a critical factor influencing market sentiment. The U.S. District Court for the Northern District of Illinois, Eastern Division, ruled on October 23, 2025, in favor of Abbott in the case Brown v. Abbott. The court granted the company summary judgment, dismissing claims that its cow-milk-based formula caused necrotizing enterocolitis (NEC) in a premature infant. This marked Abbott’s third consecutive win in bellwether trials, which are pivotal in shaping the trajectory of hundreds of consolidated cases against the firm.

The ruling centered on the plaintiffs’ inability to demonstrate a feasible alternative to SSC-24. Judge Rebecca Pallmeyer emphasized that Abbott had presented “substantial and uncontested evidence” regarding the formula’s utility and the infeasibility of a human-milk-based substitute. Plaintiffs had argued that a human-milk-derived formula would be a safer option, but the court noted logistical and economic barriers, including the limited availability of donor milk and the impracticality of scaling such a product. The decision underscored the legal principle that a product’s utility—particularly in critical care settings—must be balanced against its risks, even if alternatives exist.

The outcome carries significant implications for Abbott’s legal strategy. As bellwether cases, these rulings are intended to guide the resolution of hundreds of other pending lawsuits in federal court. Abbott’s consistent success in these cases has reinforced its position that the claims against it lack scientific and legal merit. The company reiterated this stance in a public statement, emphasizing the safety and necessity of its preterm infant nutrition products. However, the legal landscape remains complex: while federal courts have favored Abbott, state courts have produced mixed results, including a $495 million verdict against the company in a prior case that is now under appeal.

The court’s decision also highlights broader debates in neonatal care. Medical experts acknowledge that breast milk is ideal for preterm infants but caution that it is not always available. The U.S. Food and Drug Administration (FDA), Centers for Disease Control and Prevention (CDC), and National Institutes of Health (NIH) have stated there is no conclusive evidence linking preterm infant formula to NEC. Nonetheless, some parents and advocacy groups argue that manufacturers should improve warnings about potential risks. The ruling, however, appears to limit liability by framing the formula as a necessary and widely available backup option in cases where breast milk is unavailable.

While the legal victory may provide short-term relief, Abbott’s exposure to litigation remains substantial. The court is set to hear a fourth bellwether case, and numerous state-level lawsuits continue. Additionally, the company faces reputational risks if public skepticism about its products persists. However, given that the infant formula segment constitutes a small portion of Abbott’s overall revenue, the financial impact of these cases is likely limited. The stock’s modest gains on October 27 suggest that investors viewed the ruling as a positive but not transformative development, with broader market dynamics and the company’s core business performance likely playing a larger role in long-term valuation.