Frankfurt (Reuters) – Shares in Bayer were down 5.9 percent in early trade on Tuesday after a jury awarded more than $2 billion to a California couple in the largest U.S. jury verdict against the company over allegations its Roundup weed killer causes cancer.
FILE PHOTO: The Bayer AG logo sits on display at the headquarters in La Garenne-Colombes, near Paris, France, May 13, 2019. REUTERS/Benoit Tessier/File Photo
That put the stock at its lowest level in almost seven years, even though the punitive damages award is likely to be reduced due to U.S. Supreme Court rulings that limit the ratio of punitive to compensatory damages to 9:1.
The jury awarded a total of $2 billion in punitive damages and $55 million in compensatory damages, concluding that Roundup – based on herbicide glyphosate – had been defectively designed, and that the company failed to warn of the herbicide’s alleged cancer risk.
Bayer said in a statement on Monday that it was disappointed with the verdict and would appeal. A spokesman called the jury’s decision “excessive and unjustifiable.”
It was the third consecutive U.S. jury verdict against the company in litigation over the chemical, which Bayer acquired as part of its $63 billion purchase of Monsanto last year.
Bayer, inventor of Aspirin and maker of stroke prevention drug Xarelto and Yasmin birth control pills, faces U.S. lawsuits from more than 13,400 plaintiffs over the herbicide’s alleged cancer risk.
The U.S. Environmental Protection Agency this month reaffirmed that glyphosate was safe to use. The European Chemicals Agency and other regulators around the globe have also found glyphosate not likely to be carcinogenic to humans.
The World Health Organization’s International Agency for Research on Cancer, however, concluded in 2015 that the chemical probably causes cancer.
Bayer, which was chided by investors for the stock rout at the annual general meeting this month, has said that the litigation had had no effect on strong demand from U.S. lawn and garden owners for its glyphosate-based herbicides, adding that demand from U.S. farmers continued to be driven by the weather.
Under a push to divest assets including its animal health division, Bayer late on Monday said it had agreed to sell U.S. sun care brand Coppertone to Nivea owner Beiersdorf, for $550 million.
Reporting by Ludwig Burger; Editing by Michelle Martin