Investors flee Bayer after second glyphosate trial blow

FRANKFURT AM MAIN: The threat to German chemical giant Bayer and subsidiary Monsanto from US litigation swelled, when its share price plunged after a jury ruled weedkiller Roundup was a ‘substantial factor’ in an amateur gardener’s cancer.

A wave of lawsuits has put pressure on Bayer since its US$63-billion takeover of Monsanto last year, spooking investors who worry damages payouts could quickly mount into the billions if the firm fails to convince courts its product is safe.

Chief executive Werner Baumann said last month the company faced a total of 11,200 US cases over Roundup and its active ingredient glyphosate, a herbicide key to Monsanto’s business model that has come in for intense scrutiny around the world.

That mass of lawsuits meant markets shuddered after a federal court finding Tuesday that Roundup was behind the non-Hodgkin’s lymphoma suffered by 70-year-old Edwin Hardeman, who used the product for decades on the garden at his California home. The second major legal setback in a year set the Leverkusen-based group’s stock ebbing well into Wednesday trading after an initial plunge.

By 11:20 am in Frankfurt (1020 GMT), the shares were trading down 13.2 per cent at 60.53 euros (US$68.71), dragging down the DAX index of blue-chip German shares.

Since the merger was completed, Bayer’s stock has shed almost 40 per cent of its value. Tuesday’s “decision... has no impact on future cases and trials because each one has its own factual and legal circumstances,” Bayer said in a statement, adding that it stood behind science it says demonstrates glyphosate is safe.

But IG analyst Chris Beauchamp told AFP the prospect of thousands of plaintiffs potentially being awarded tens of millions of dollars each means investors “start doing the numbers, and it doesn’t look very pretty at all”. — AFP