Bayer faced with 18,400 lawsuits over Roundup

German chemicals giant Bayer is facing 5,000 more lawsuits in the US against its subsidiary Monsanto due to its potentially carcinogenic pesticide Roundup, the company said yesterday.
The 5,000 additional lawsuits were filed in the last three months, bringing the total number of charges against the company to 18,400, the company said during its presentation of second-quarter results.
One year after taking over US seeds and pesticides maker Monsanto in a $63bn gamble, the payoff for German chemicals and pharmaceuticals giant Bayer remains in question as it battles a massive wave of cancer lawsuits over the flagship weedkiller.
The number of plaintiffs claim that Monsanto herbicide glyphosate – present in widely-used weedkiller Roundup – made them sick.
In early cases, California juries found for plaintiffs, agreeing that blood cancer non-Hodgkins lymphoma had been caused by glyphosate-containing products.
In post-trial revisions, judges have stopped short of overturning those jury verdicts while reducing damages awards.
Last week, a spectacular $2bn payout was slashed to $87mn in the case of California couple Alva and Alberta Pilliod.
Nevertheless, “the court finds that there was substantial evidence to support the jury’s findings” that Roundup caused the Pilliods’ cancers, judge Winifred Smith wrote.
There was evidence Monsanto had “sought to impede, discourage or distort scientific inquiry and the resulting science”, she added.
World Health Organisation (WHO) body the International Agency for Research on Cancer (IARC) judged in 2015 that glyphosate was “probably carcinogenic” – although this was a finding in absolute terms, rather than one related to typical levels of exposure.
Bayer points to long-term studies of thousands of glyphosate users which it says show no increased cancer risk.
An “extensive body of reliable science and conclusions of leading health regulators worldwide that confirms glyphosate-based herbicides can be used safely and that glyphosate is not carcinogenic”, it reiterated last week.
“We believe that will ultimately prevail in this litigation on the strength of sound science,” chief executive Werner Baumann told investors yesterday in a teleconference.
Bayer chiefs are confident they can prevail before American appeals courts, which do not have juries.
However, investors are less sanguine, with the share price sliding 4.6%, to €56.62 ($63.15) around 3pm in Frankfurt (1300 GMT), making it one of the worst performers on the blue-chip DAX index.
Executives had hoped to convince markets to back their bet on helping farmers grow the food needed to feed a swelling world population – headed for 10bn people by 2050.
Instead, the stock has lost almost half its value compared with prices in early June 2018, ahead of the Monsanto merger’s completion.
With a market cap around €55bn or $61bn, Bayer is now worth less than it originally paid for the St Louis-based Monsanto.
The long slide prompted Bayer shareholders to issue a dramatic slap in the face to the board at the group’s annual general meeting in April, as 55.5% voted against approving executives’ 2018 actions – including the merger.
Some confidence was restored in June when activist hedge fund Elliott revealed a €1.1bn stake in Bayer and backed its legal defence strategy.
Bayer had earlier announced the hiring of high-profile US lawyer, John Beisner, highlighting his experience in both “successful defences and settlements”, and said it would “actively” engage with a court-ordered mediation in California that could end in a settlement.
Berenberg analysts last month judged that a $1mn per plaintiff settlement could cost Bayer around €10bn, while Markus Mayer of Baader bank told DPA yesterday that a potential payout could reach between €15bn and €20bn.
“We would of course only consider a settlement if financially reasonable and if it can achieve finality of the overall litigation,” chief executive Baumann said.
Alongside legal risks, Bayer has had to contend with taking on Monsanto’s corrosive reputation.
Especially in Europe, Monsanto is disliked by environmentalists and some politicians for its reliance on genetically modified seeds and compatible pesticides.
Austria this month banned glyphosate use entirely and France is set to follow suit, while in 2017, the herbicide’s continent-wide license was renewed for only five years rather than the usual 10.
Bayer is also tackling a restructuring announced last autumn that includes some 12,000 job cuts, or about 10% of its workforce.