July 26 (Reuters) - A jury on Friday found that Abbott

Laboratories' ( ABT ) specialized formula for premature infants

caused an Illinois girl to develop a dangerous bowel disease,

ordering the healthcare company to pay $495 million in

compensatory and punitive damages.

The verdict in St. Louis, Missouri state court comes in the

first trial against the company out of hundreds of similar

claims over the formula pending in courts around the country,

which Reuters viewed via Courtroom View Network.

The jury awarded $95 million in compensatory damages and

$400 million in punitive damages.

Before the jury was sent to consider punitive damages,

Abbott attorney James Hurst said that the verdict risks sending

the wrong message and limiting doctors' options for feeding

preterm infants who cannot breastfeed.

"This is a gut punch," Hurst said. "It is as hard as it

gets."

Illinois resident Margo Gill, who brought the case against

Abbott, alleged that the company failed to warn that its formula

could cause a potentially deadly disease called necrotizing

enterocolitis (NEC) in premature babies.

Abbott in a statement said that it strongly disagrees with

the verdict and would try to have it overturned.

Abbott spokesman Scott Stoffel said that specialized

formulas and fortifiers, like the one in this case, are among

the only available options to feed premature infants, and there

is no scientific evidence showing that Abbott's preterm infant

products cause or contribute to causing NEC.

NEC, which causes the death of bowel tissue, mostly affects

premature newborns and has a fatality rate of between 15% and

40%. Gill's child, Robynn Davis, who developed NEC after being

given Abbott premature infant formula while in a neonatal

intensive care unit in 2021, survived, but suffered irreversible

neurological damage because of her illness and will require

long-term care.

Lawyers for Abbott, which makes Similac brand formula,

argued during the trial that Robynn's long-term injuries were

caused by trauma at birth that deprived her brain of oxygen.

They said that, while mother's milk lowers the risk of NEC,

specialized formula is sometimes necessary and life-saving for

premature babies.

Close to 1,000 lawsuits have been filed against Abbott,

Enfamil formula maker Reckitt Benckiser ( RBGPF ) or both in

federal or state courts. More than 500 are centralized in an

Illinois federal court, with others pending in Illinois,

Missouri and Pennsylvania.

The lawsuits claim that the companies did not warn doctors

that infants receiving formula have a greater risk of NEC

compared to infants who are breast-fed or given donor milk or

human milk-derived formula. Reckitt, like Abbott, has denied the

claims.

Like all of the lawsuits over NEC, Friday's case involves

cow's milk-based formula and products for fortifying mother's

milk that are specially made for infants in hospital settings,

not ordinary formula available to consumers in stores.

The first lawsuit to go to trial, against Reckitt in

Illinois, ended with a $60 million jury verdict in March.

Reckitt is appealing that verdict and has argued that the

plaintiff's case relied on unsound expert testimony.

The litigation has concerned some investors. Reckitt's share

price fell about 15% after the March verdict, and Abbott's about

4%. Neither stock has fully recovered, although analysts at

JPMorgan and Barclays have said they believe the companies'

ultimate liability is likely to be small.

The NEC Society, a patient-led non-profit organization

working to combat the disease, has criticized the lawsuits,

saying that "feeding decisions should be made at patients'

bedsides, not in courtrooms."

The NEC lawsuits are separate from ongoing litigation

against Abbott over the shutdown of its Sturgis, Michigan, plant

and subsequent recall of batches of baby formula for possible

contamination, which contributed to a nationwide formula

shortage in 2022. There have been no trials in those cases.