Bayer AG (BAYRY) - Get Bayer AG Report shares topped the German market Tuesday following a Federal Court ruling in California that slashed the amount of damages the chemicals group will need to pay after a jury found its Roundup weedkiller cause a man to contract non-Hodgkin's lymphoma.
U.S. District Court Judge Vince Chhabria upheld a March jury verdict that awarded Edwin Hardeman of Santa Rosa, California $5.27 million in compensatory damages after he claimed his long-term exposure to Roundup, first made by Monsanto by bought by Bayer as part of its $63 takeover last year, caused his cancer diagnosis in 2014. The San Francisco judge, however, cut the level of punitive damages to $20 million from $75 million, noting he award breached Federal laws on the ratio of punitive to compensatory damages.
"Monsanto's conduct, while reprehensible, does not warrant a ratio of that magnitude, particularly in the absence of evidence showing intentional concealment of a known or obvious safety risk," Chhabria wrote in his decision, which was published late Monday.
Bayer shares were marked 2.3% higher in early European trading Tuesday to change hands at €59.93 each in Frankfurt, a move that still keeps the stock in negative territory for the year.
Bayer vowed to appeal the broader verdict, however, even as it added that the reduced damages were a "step in the right direction".
Last month, activist investor Elliot Advisors revealed a $1.1 billion stake in the chemicals group and supported plans to boost its legal team in the face of thousands of Roundup weedkiller lawsuits.
Elliot revealed its stake late Wednesday after Bayer said it hired outside counsel to advise its supervisory board amid myriad lawsuits linked to its glyphosate-based weedkiller, known as Roundup, which is assumed following its $63 billion takeover of Monsanto last year.
Analysts have estimated Bayer's glyphosate-based products liability at anywhere between €4 billion and €15 billion, and the company has said some 13,400 lawsuits remain outstanding.
Last month, a jury in Alameda County Superior Court in Oakland, California awarded Alva and Alberta Pilliod $2 billion in punitive damages and $55 million in compensatory relief after the pair said Monsanto's Roundup weed killer caused them to contract cancer.
That verdict followed a 2018 decision from San Francisco Superior Court Judge Suzanne Bolanos, who ruled that said Bayer should pay $39 million in punitive damages and a further $49 billion in compensatory damages to Dewayne Johnson, a school district groundskeeper who argued that Roundup and Ranger Pro weedkillers, as well as its other glyphosate-based products, did not carry sufficient warnings for the risks of cancer that they carried.
A California jury had originally awarded Johnson $289 million in total damages following a controversial verdict reached in the summer of 2018.