Formula Maker's Stock Drops on Alleged Infant Death

The Associated Press reports a second baby is sick with Cronabacter after reportedly claiming the life of a Lebanon, Missouri newborn. That first newborn, 10-day-old Avery Cornett was preliminarily diagnosed with the rare bacteria after reportedly being fed with the Enfamil baby formula by Meade Johnson

.

is said to be an extremely rare bacteria that causes fatal infections on bloodstream and central nervous systems, especially on infants with a weak immune system. Only 50 or so cases have been identified in the last 40 years, according to

. When such unfortunate tragedies are linked to companies and their products, fortunes are preserved or obliterated by action and public relations. Both Enfamil maker Meade Johnson

and seller Wal-Mart

were quick to act in order to isolate the problem.

Meade Johnson's spokesperson Chris Perille on the matter soon after the news broke and

reported it in real time (Give Benzinga Pro a try

). Through written remarks, Mr Perille told us that the company's intensive pre-packaging testing “includes tests for Cronobacter, consistent with the methodology used by both the FDA and the CDC. If an ingredient or a batch of powdered infant formula product were found to contain Cronobacter, it would be rejected and not distributed.” Wal-Mart went further as it pulled all similarly packaged units of the allegedly tainted Enfamil product out of more than 3,000 stores over 49 states just a day after it pulled the product from its Lebanon, MO store where the fateful bottle fed to the dead infant had been purchased. Wal-Mart spokeswoman Dianna Gee told

that the company was waiting on an active investigation on the product by the Missouri Department of Health, and that the “products could be returned at a later date” should no direct correlation be evidenced. That investigation by the Department of Health carries obvious implications for those new parents who may be holding any related products, but the stakes are arguably high for the manufacturer as well. Infant formula made up approximately

of the company's net sales in 2010. The weight of a human death so far—the second case of Cronabacter appears to be unrelated to Enfamil—could carry material consequences for the company, if in fact a fault is identified somewhere in its production and packaging process. Shares are currently reaching a low of session at about 17 percent lower in comparison to yesterday's close, so investors are reacting to a worse case scenario on that finding.