Bayer hit with $2.1B judgement in roundup case, stock plummets

Shares of Bayer (OTC:BAYRY) were plummeting on Monday after it was handed a massive defeat in a court case involving its Roundup weed killer product.

A jury in Georgia demanded that Bayer, which owns Roundup through its acquisition of Monsanto several years ago, pay $2.1 billion in damages to the plaintiff, John Barnes. Barnes filed a suit against Bayer in 2021 claiming that Roundup caused his non-Hodgkin’s lymphoma cancer.

This is the latest of thousands of cases that have been filed against Bayer over the Roundup weed killer. There have been some 181,000 claims overall filed against the company over Roundup.

This latest case went to trial and the plaintiff was awarded $65 million in compensatory damages and $2 billion in punitive damages. It is one of the largest awards so far among the Roundup cases.

As of last year, prior to this verdict, Bayer had been hit with more than $4 billion in damages from various court cases that went to trial, according to Reuters.

Bayer’s stock price dropped about 7% on the day and is now trading at just over $22 per share. The stock price is still up 16% year-to-date, but over time, the cases have taken their toll. Bayer stock has an average annualized return of -14% over the past 5 years and -17% over the past 10 years.

Bayer appeals

The company appealed the verdict, maintaining that the state-based failure to warn claim in this and other Roundup cases is preempted by federal law.

“We disagree with the jury’s verdict, as it conflicts with the overwhelming weight of scientific evidence and the consensus of regulatory bodies and their scientific assessments worldwide. We believe that we have strong arguments on appeal to get this verdict overturned and the excessive and unconstitutional damage awards eliminated or reduced. The court previously granted the majority of the company’s motion for a directed verdict finding that the plaintiff had failed to prove most of their causes of action in this case,” the firm said in a statement.

Last year, it appealed a $2.25 billion verdict in Pennsylvania and got it down to $400 million. The company remains committed to trying cases as it has had favorable outcomes in 17 of the last 25 trials, with damages in cases that have reached final judgments reduced 90% overall compared with the original jury awards.

Further, the firm says it stands behind the safety of Roundup, which transitioned to new formulations and different active ingredients starting in 2023. It said this action was taken to manage litigation risk and not because of any safety concerns.

As for warding off future lawsuits, Bayer said it is appealing to the U.S. Supreme Court on the federal preemption question. If granted, it could largely end the Roundup litigation, officials said.

Bayer stock is dirt cheap, but there’s just way too much noise right now to consider it in a portfolio.