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" – analyst

The threat to the chemical giant Bayer and its subsidiary Monsanto from US litigation grew today, when its share price plunged after a jury ruled that the weedkiller Roundup was a "substantial factor" in an amateur gardener's cancer, as Phys.org reported.

A wave of lawsuits has put pressure on Bayer since it paid $63 billion to take over Monsanto last year, worrying investors who fear that damages payouts could quickly mount into the billions if the firm fails to convince courts that its product is safe.

Chief executive Werner Baumann said last month that 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 were impacted by the federal court decision on 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 of his home in California.

The second major legal setback in a year set Bayer's stock falling well into Wednesday trading after an initial plunge, Phys.org reported.

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

Since the Bayer-Monsanto merger was completed, Bayer's stock has lost almost 40 percent of its value.

Bayer said in a statement that "the decision in phase one of this trial has no impact on future cases and trials because each one has its own factual and legal circumstances". It added that it stood behind science it says shows glyphosate is safe.

But senior market analyst at IG 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".

The latest case has so far brought no damages award against Bayer, as jurors now have to decide whether Monsanto is liable for the harm suffered by Hardeman.

"Monsanto has not taken a responsible, objective approach to the safety of Roundup," Hardeman's lawyers Aimee Wagstaff and Jennifer Moore said in a joint statement.

Source: Phys.org
https://phys.org/news/2019-03-bayer-plunge-cancer.html#jCp