Bayer reports sharp rise in legal cases linked to its weedkiller
US court ruled earlier this month that Roundup and Ranger Pro products cause cancer
Bayer said on Thursday that it has seen a large increase in US legal cases linked to its best-selling weedkillers Roundup and Ranger Pro, following a landmark verdict by a California court earlier this month that found the products cause cancer.
The German pharmaceuticals and chemicals group said it was aware of about 8,000 plaintiffs in US state and federal courts, up from 5,200 earlier this year. “The numbers may rise or fall over time but our view is that the numbers are not indicative of the merits of the plaintiffs’ cases,” said Werner Baumann, Bayer chief executive,
The disclosure came as Bayer’s senior management sought to calm investor fears about the legal risk posed by the recent setback, insisting in a conference call on Thursday that it would “vigorously defend this case” and that there was no sign of an impact on sales.
Bayer shares have fallen sharply in recent weeks, after a California court awarded $289m in damages to a school groundskeeper with terminal cancer. The jury found that the plaintiff’s illness was a direct cause of his exposure to Roundup and Ranger Pro, two herbicides that include the chemical glyphosate. Both products are made by Monsanto, which Bayer bought earlier this year.
“Farmers and growers have been using glyphosate safely and effectively for more than 40 years,” Mr Baumann said on Thursday. “The safety of glyphosate has been substantiated by more than 800 scientific studies and reviews . . . which conclude that it can be used safely and does not cause cancer.”
He added: “The verdict of one jury in one case does not change the scientific facts”.
Mr Baumann said Bayer would seek to have the verdict overturned, and had no plans to settle with the plaintiffs.
Wolfgang Nickl, the German group’s chief financial officer, said Bayer had no plans to make new provisions for damages in relation to the glyphosate cases, but was likely to make some provisions for the costs of its legal defence.
Bayer’s shares have swung wildly in recent weeks, falling from €93.6 before the California verdict was announced to a five-year low of €75.5 last week. The stock has recovered some ground since, and was trading at €81.9 on Thursday afternoon, down 2 per cent on the day.
Some analysts believe the recent market reaction has been overdone, pointing out that jury verdicts in cases such as the one against Bayer are often overturned, or end up with sharply reduced damages. In a research note published ahead of the conference call, analysts at Berenberg estimated the group’s potential liability at $3.8bn.
The note also argued that there would be “minimal” impact on business. “We do not expect a significant reduction in glyphosate use; it remains supported by most major regulatory bodies and has become a critical pesticide in modern farming practice,” Berenberg said.
Bayer gave much the same assessment on Thursday. “We don’t anticipate any negative impact on sales [of glyphosate products]. Nothing whatsoever has changed in the regulatory standard of the products. There is simply very high demand and has been for many, many decades now,” said Liam Condon, head of Bayer’s Crop Science division.