Abbott reports strong profit despite infant formula crisis

Abbott Laboratories reported strong profit on Wednesday, despite spending the last few months responding to criticism for the problems that led to the closure of one of its infant formula production plants.

Its adjusted earnings per share grew 22% to $1.43, beating estimates. Abbott’s sales rose 14% to $11.3 billion, boosted in part by the popularity of its BinaxNOW rapid home COVID-19 tests. Abbott, which is based in the northern suburbs, had sales related to COVID-19 tests worth $2.3 billion in the second quarter.

However, its nutrition sales fell 4.5% due to the temporary closure of its plant in Sturgis, Michigan, which produces infant formula.

That facility closure is widely blamed for exacerbating a nationwide infant formula shortage that has left many store shelves bare and sent the parents fighting.

Abbott closed the facility earlier this year and recalled formulas produced there, as the US Food and Drug Administration announced it was investigating complaints of Cronobacter sakazakii infections among infants who allegedly consumed formula from the plant. The babies were hospitalized and Cronobacter may have contributed to the deaths of two babies, according to the FDA.

FDA inspected the facility from January 31 through March 18 and found that five environmental subsamples collected from the Sturgis facility tested positive for Cronobacter sakazakii, although product samples collected by FDA at the facility tested negative for Cronobacter. The FDA also found standing water, cracks in key equipment, and roof leaks, among other problems.

Abbott leaders have apologized for the company’s role in the national shortage. Abbott, however, has said that the Cronobacter found in environmental testing during the investigation was in “non-product contact areas of the facility and has not been linked to any known childhood illnesses.”

The FDA has said that “despite extensive investigation, the evidence neither confirms nor rules out a definitive link between these infant deaths and the product produced at Abbott Nutrition’s Sturgis plant.”

After making improvements to the facilities, Abbott resumed production at the plant in June and then had to go back to work. suspend it due to storms and floods

It again resumed production of its EleCare formula at that plant on July 1 and is working to restart production of its popular Similac formula, Abbott CEO and Chairman Robert Ford said Wednesday during an earnings call. EleCare is a formula for infants and children with allergies and certain gastrointestinal disorders. The company and the federal government also shipped formulas from abroad to the US to help with the shortage.

“We will do everything we can to expedite product delivery to retailers so families can get access to the product they need as quickly as possible,” Ford said.

In recent months, Abbott has faced scathing criticism about its handling of problems at the plant, from both FDA officials and members of Congress who accused the company of negligence and questioned how a plant closure could lead to such dire shortages.

Ford said Wednesday that Abbott is working to expand its formula manufacturing capacity and ensure there are redundancies within its system.

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