Bayer shares fall 10% after Monsanto’s Roundup cancer trial
Bayer shares plunged more than 10% on Monday after a California jury ordered the German company’s newly acquired Monsanto subsidiary to pay $289 million for not warning of cancer risks posed by its main weed killer.
The case against Monsanto, bought by Bayer this year for $63 billion, is the first of more than 5,000 similar lawsuits over the company’s glyphosate-based weedkillers, including its Roundup brand, across the United States.
Monsanto said on Friday that it would appeal against the verdict which is the latest episode in a long-running debate over claims that exposure to Roundup can cause cancer.
“The jury’s verdict is at odds with the weight of scientific evidence, decades of real world experience and the conclusions of regulators around the world that all confirm glyphosate is safe and does not cause non-Hodgkin’s lymphoma,” Bayer said in a statement, referring to the plaintiff’s type of cancer.
The case of school groundskeeper Dewayne Johnson, filed in 2016, was fast-tracked for trial due to the severity of his non-Hodgkin’s lymphoma, a cancer of the lymph system that he alleges was caused by Roundup and Ranger Pro, another Monsanto glyphosate herbicide.
Having closed the Monsanto takeover, Bayer is only awaiting some final antitrust-related asset sales before folding it into its own organization. It did not negotiate any payments from Monsanto shareholders for Roundup-related litigation.
Bayer shares were down 11 percent at 83.04 euros at 0915 GMT, the worst performing stock on the Stoxx Europe 600 index .
“Whilst an appeal is certain and may indeed likely result in the penalty being moderated at a minimum if not reversed altogether, a large number of similar pending cases will now likely multiply.”
The controversy could also affect future revenues.
Genetically modified (GM) crops that withstand glyphosate are a main source of cash for Monsanto, mainly generated in North and South America, where the technology is widely accepted.