Bayer Shares Tumble Following $2 Billion Cancer Case In US
Following its latest loss over a case involving its popular weed killing product called Roundup, Bayer's stock market shares fell by as much as 5 percent on Tuesday. A US jury found the company guilty of defectively designing its herbicide glyphosate-based product and for failing to warn its consumers of its product's cancer risk. Bayer was asked to pay punitive damages of $2 billion to a California couple, plus $55 million in compensatory pay.
Bayer share prices reached its lowest level in almost seven years following the court's decision, likely caused by a loss in confidence from investors over the company's future moving forward. At the end of the trading day, share prices closed 2 percent lower at $62.01 per share.
In response to the verdict, Bayer mentioned in a statement that it was very much disappointed with how everything had turned out. The company also mentioned that the decision was excessive and unjustified. The latest conclusion is the third of its kind to hit the Leverkusen-based company, which is currently dealing with a number of litigations over its herbicide product. The company acquired the product shortly after its $63 billion purchase of Monsanto last year.
According to analysts, there is still a possibility that the $2 billion in punitive damages could be significantly reduced once Bayer launches its appeal. However, the damage done by the decision to the company's reputation and to investor's confidence cannot be reversed. The firm is still dealing with a number of other lawsuits concerning its products and the outcome of those cases could spell trouble for the company if the conclusion is the same.
The ongoing litigations against the company have so far slashed more than $5.6 billion from the company's valuation. The outcome of its upcoming cases and its appeal on those cases is still uncertain.
As it stands, the company is currently facing dozens of lawsuits in the United States from more than 13,400 plaintiffs who allegedly got cancer from prolonged use of the company's herbicide product.
The company that invented the Aspirin and the maker of popular drugs such as Xarelto and Yasmin has so far denied that its product causes cancer.
The US Environmental Protection Agency recently reported that it did not find the chemical glyphosate to be carcinogenic. The European Chemical Agency also had more of the same conclusion and stated that it found glyphosate to be safe to use. However, the World Health Organization's International Agency for Research on Cancer reported a different finding and stated that the chemical could cause cancer.