Bayer says U.S. plaintiffs on glyphosate more than double since July


FRANKFURT (Reuters) – Germany’s Bayer (BAYGn.DE) is now facing 42,700 U.S. plaintiffs blaming its glyphosate-based weedkillers for their cancer, more than twice the tally in July, raising the stakes in the group’s efforts to reach a settlement.

FILE PHOTO: Logo and flags of Bayer AG are pictured outside a plant of the German pharmaceutical and chemical maker in Wuppertal, Germany August 9, 2019. REUTERS/Wolfgang Rattay

“This significant increase is clearly driven by the plaintiff-side television advertising spend which is estimated to have roughly doubled in the third quarter compared with the entire first half of the year,” Bayer, which last year acquired Monsanto for $63 billion, said as it reported third-quarter profit grew in line with expectations.

“The number of lawsuits says nothing about their merits,” it said, adding the company was still constructively engaged in a mediation process ordered by a federal judge.

Bayer, the inventor of aspirin and owner of Yasmin birth control and Claritin allergy relief brands, is widely expected to eventually buy itself out of the litigation wave, with analysts estimating the size of a future settlement at $8-$12 billion.

Many of them, however, see a knock-down share price reflecting market expectations for the lawsuits to cost as much as $20 billion.

The stock has lost about 30% in value since last August, when a California jury in the first such lawsuit found Monsanto should have warned of the alleged cancer risks associated with its glyphosate-based weedkillers such as Roundup.

Bayer shares were up 0.8% at market open at 0800 GMT. The German group had earlier this month prepared investors for a surge in cases, saying the prospect of a settlement was fanning mass tort lawyers’ efforts to recruit plaintiffs.

Bayer, which says regulators and extensive research have found glyphosate to be safe, is banking on U.S. appeals courts to reverse or tone down the first three court rulings that have so far awarded tens of millions of dollars to each plaintiff.

Third-quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the group rose 7.5% to 2.3 billion euros ($2.6 billion), in line with market expectations. They were helped by higher sales of crop protection chemicals, seeds and consumer healthcare products.

It said its new 2019 guidance confirmed its previous one, except for stripping out its animal health division and a stake in chemical park operator Currenta being divested, as well as a currency burden of about 100 million euros.

The drugs and pesticides maker is now expecting 11.5 billion euros in full-year EBITDA before special items, down from 12.2 billion euros estimated in July.

Reporting by Ludwig Burger; Editing by Michelle Martin and Deepa Babington

Our Standards:The Thomson Reuters Trust Principles.



Source link reuters.com

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