Bayer (BAYRY) stock fell after the German company was ordered by a Georgia jury to pay $2.1 billion to a plaintiff who claimed his cancer was caused by the firm’s Roundup weedkiller. Shares of the pharmaceutical and agrochemical giant listed in Germany (DE:BAYN) slumped on Monday following the ruling, the latest blow for the company as it battles a series of legal cases related to Roundup.
The Georgia court decision delivered late Friday, awarded plaintiff John Barnes $65 million in compensation and an additional $2 billion in punitive damages. The judgment, which Bayer said it would appeal, comes after a record-setting $2.25 billion damages verdict in Philadelphia earlier this year.
Bayer Protests
Bayer said the Georgia ruling “conflicts with the overwhelming weight of scientific evidence and the consensus of regulatory bodies and their scientific assessments worldwide,” adding that it has “strong arguments on appeal to get this verdict overturned.”
Bayer, one of the world’s largest seeds and pesticides makers, has faced tens of thousands of similar lawsuits and set aside $16 billion for damages since Monsanto, which it acquired in 2018, was first accused of failing to advise customers about the risks of glyphosate, the key active ingredient in Roundup. As of the end of January, Bayer said about 114,000 of approximately 181,000 claims have been resolved or deemed to be ineligible.
The company hopes that a favorable ruling by the U.S. Supreme Court on the federal “pre-emption question” could largely end the Roundup litigation. The main legal question at stake in many of the company’s appeals is whether state-based failure-to-warn claims are pre-empted by federal labeling laws regulating crop protection products. Despite the U.S. Environmental Protection Agency EPA stating that glyphosate does not cause cancer, state-based claims have relied on studies that link the chemical to non-Hodgkins lymphona. According to Bayer, the fact that the EPA approved the Roundup label without a warning should prevent such state-based claims from moving forward in court.
Is Bayer a Good Stock to Buy?
On Wall Street, analysts have a Hold consensus rating on Bayer stock, based on nine Holds. The average price target of €26.89 implies about 20% upside from current levels.
