(Reuters) - Wal-Mart Stores Inc (WMT.N) pulled some Enfamil baby formula cans from its shelves this week after the death of a Missouri newborn, sending shares of the formula’s manufacturer, Mead Johnson, down as much as 21 percent on Thursday.
The infant in Lebanon, Missouri, tested positive for Cronobacter, a bacteria that has sometimes been linked to rare illnesses in newborns and has been found in milk-based powdered baby formula.
There has been no link between the illness and the formula. The batch in question tested negative for the bacteria when it was packaged, Mead Johnson said.
Walmart began the process of voluntarily removing the product used by the infant’s family — 12.5-ounce cans of Enfamil Newborn with lot number ZP1K7G — from more than 3,000 U.S. stores late Monday night, a spokeswoman said.
The product is being held pending an investigation by health officials, who are also testing other potential contaminants including the water with which the formula was prepared.
Cans from the same batch have been sold to other retailers besides Walmart, but Mead Johnson has not been informed that any other stores have removed it, company spokesman Chris Perille said. Mead Johnson has not recalled the product.
Samples have been sent to the U.S. Centers for Disease Control and the Food and Drug Administration for testing. Until the tests are done, no link to Enfamil formula can be made. Still, The Missouri Department of Health and Senior Services urged consumers who purchased formula with that lot number to throw it away or return it to the store.
Newborn Avery Cornett died on Sunday, according to the Lebanon Daily Record. It said he was taken to the hospital late last week after appearing lethargic and displaying what his family said were signs of a stomach ache.
Cornett was one of two infants infected with Cronobacter in Missouri in the past month, according to the state’s Department of Health & Senior Services. The other infant recovered.
A growing number of Cronobacter infections among newborns has provided compelling evidence that milk-based powdered infant formulas have served as the source, the department said in a statement. One study testing such formula products from different countries found the bacteria in 14 percent of samples.
Mead Johnson said it was confident that all of its products are safe when prepared, stored and used according to the label instructions.
“The batch of our product used by the child’s family tested negative for Cronobacter when it was produced and packaged, and that has been reconfirmed from our batch records following this news,” Mead Johnson’s Perille said.
The company is working with the health authorities, he said.
Even if the product was not tainted, the Enfamil brand is likely to suffer, analysts said.
“Until the issue is resolved - and even for a period of time after - we would expect weak Enfamil sales,” said JP Morgan analyst Ken Goldman in a research note. “The question is how bad and how long the perception of tainted formula - right or wrong - will last in the public’s mind.”
Goldman said his instinct was to buy the stock on weakness, but that not enough is known yet, including what the source of the bacteria was.
Mead Johnson shares were down 10.8 percent at $68.25 late on Thursday afternoon, off an earlier low at $60.68.
Reporting By Martinne Geller in New York; Additional reporting by Lauren Keiper in Boston and Brad Dorfman in Chicago; Editing by Lisa Von Ahn and Matthew Lewis