Bayer's
Monsanto faces 8,000 lawsuits on glyphosate
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[August 24, 2018]
FRANKFURT (Reuters) - The number of U.S.
lawsuits brought against Bayer's <BAYGn.DE> newly acquired Monsanto has
jumped to about 8,000, as the German drugmaker braces for years of legal
wrangling over alleged cancer risks of glyphosate-based weedkillers.
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Bayer had previously disclosed 5,200 such lawsuits against Monsanto,
which it acquired in a $63 billion deal completed in June.
"The number of plaintiffs in both state and federal litigation is
approximately 8,000 as of end-July. These numbers may rise or fall
over time but our view is that the number is not indicative of the
merits of the plaintiffs' cases," Bayer Chief Executive Werner
Baumann told analysts in a conference call on Thursday.
Bayer shares have lost more than 10 percent since Monsanto was
ordered on Aug. 10 to pay $289 million in damages in the first U.S.
lawsuit over glyphosate-based weedkillers such as Roundup and Ranger
Pro.
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The legal headache adds to a number of distractions for Bayer, such
as falling consumer care product sales and a rebuke on production
practices from the U.S. drugs watchdog, as it seeks to strengthen
its drug development pipeline and has begun integrating Monsanto
into its organisation.
"While this is disappointing, it is not surprising. Indeed, in our
litigation scenario analysis, we assumed a doubling of cases to
10,400," said Alistair Campbell, analyst at brokerage Berenberg.
Bayer shares were down 1.8 percent at 1600 GMT while the German blue
chip index <.GDAXI> was up 0.2 percent.
CEO Baumann reiterated Bayer's view that the jury's verdict on Aug.
10 was inconsistent with the science-based conclusions of
regulators.
Bayer said it will initially petition the judge to reverse the
jury's verdict from Aug. 10, and "if necessary" challenge the ruling
with California appellate courts, which will take at least a year.
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When asked whether Bayer would consider settling cases out of court,
he said: "We will vigorously defend this case and all upcoming
cases."
Bayer executives on the call stressed that demand for glyphosate and
seeds for crops that tolerate the broad-spectrum herbicide had not
been affected by the verdict.
"Nothing whatsoever has changed in the regulatory status of the
product. There is simply very high demand, and has been for many
decades for glyphosate. It is an invaluable tool for growers," said
Liam Condon, the head of Bayer's newly enlarged Crop Science
division.
Bayer also said on Thursday that it sees no reason to re-assess the
legal risks from Monsanto.
Last week Bayer, which is retiring the Monsanto name, launched the
integration of Monsanto into its organisation. That is seen as a
daunting task even without the litigation, almost two years after it
signed the $63 billion deal.
Bayer's second-quarter results, due on Sept. 5, would include
provisioning for legal defence costs but no money would at that
point be set aside for any possible future damages, finance chief
Wolfgang Nickl said.
(Reporting by Ludwig Burger; Editing by Douglas Busvine and Susan
Fenton)
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