• 29 May 2021
• Admin
• News Article

Bayer Hits Major Roundup Set Back Again As Judge Rejects Unreasonable $2B Settlement

Bayer’s efforts to put an end to the consuming Roundup litigation have hit a wall, raising uncertainties over the weedkiller’s future and its impact on the German conglomerate’s financial position. A U.S. federal judge in San Francisco on Wednesday rejected Bayer’s already revised $2 billion proposal to settle potential future lawsuits alleging Roundup causes cancer. The deal would have put a halt to litigation over four years, during which time eligible plaintiffs could have received compensation of up to $200,000 each. In handing down a rejection, U.S. District Judge Vince Chhabria called the plan “clearly unreasonable.” It “would accomplish a lot for Monsanto,” the crop sciences giant Bayer bought in a $63 billion acquisition, but it “would accomplish far less for the Roundup users,” the judge wrote. As a result, Bayer has immediately launched a new plan to tackle the long-running legal overhang. Bayer figures the $2 billion it has set aside for future claims is appropriate, but it will continue to review the provision, CEO Werner Baumann said in a statement Thursday. Bayer will now “reassess ongoing efforts to settle existing claims,” he added. The company previously committed $9.6 billion to settle with known plaintiffs, wrapping or nearly finalizing 96,000 cases. RELATED: The top 20 pharma companies by 2020 revenue | 12. Bayer Meanwhile, Bayer is also rethinking the residential market for Roundup because the “overwhelming majority” of lawsuits have been brought by people who use the weedkiller in the lawn and garden, execs said. For that market, Bayer is considering replacing the product’s active ingredient glyphosate. The move wouldn't affect sales, Bayer crop science chief Liam Condon said during a conference call Thursday. Roundup litigation has haunted Bayer for years, pressuring its stock performance and diverting the large corporation’s attention. Looking forward, ballooning settlement costs could limit Bayer's ability to invest elsewhere, including its pharma business. RELATED: Bayer unveils first look at its post-Xarelto, post-Eylea life—and it's better than expected In the pharma biz, Bayer is prepping for the expected losses of exclusivity to its top-selling drugs Xarelto and Eylea, which made up nearly half of pharma sales last year. As its internal pipeline looks weak, the company has been acquiring new assets and signing new partnerships to beef up its future prospects. “We will continue to monitor this and do a quarterly assessment on the potential liability,” Bayer Chief Financial Officer Wolfgang Nickl said of potential change to financial risks during the call.