My 3rd child who is now almost 3 was 4 months old and we started supplimenting with regular formula and I was still nursing and pumping. (He had weight gain issues). We would alternate a bottle of formula then a bottle of breastmilk. About a week AFTER he started drinking formula (about 3 or 4 bottles in a 24 hr period) He would develope these HUGE red welts all over his body. They would be there about 20 minutes after he drank it and fade over the next few hours. No reaction to breast milk...
We switched brands of formula, then switched to soy based formula. It cleared up. Keep an eye on it and try a different type of formula. There is soy formula, rice formula etc... At 1 yr old we started giving him dairy in small bits and he never had any reactions to it...
It could be that there is just something in the formula his system can not handle now... But it may not be an issue later.
I would stop mixing the regular formula in and try soy as a first step. Watch him closely... IE. Do the switch in the morning, not last thing at night so you can watch him thru the day...