Bayer AG (BAYRY) - Get Report shares slumped to a near seven-year low Tuesday after a jury in California awarded more than $2 billion to a pair of plaintiffs who said the chemicals group's Roundup weed killer caused them to contract cancer.
Alva and Alberta Pilliod were awarded $2 billion in punitive damages and $55 million in compensatory relief from the jury in Alameda County Superior Court in Oakland, California, the the third such ruling against the group linked to the weedkiller taken on from its $63 billion takeover of Monsanto. In the ruling, which Bayer described as "disappointing", the jury found that Roundup was defectively designed and that the company failed to warn users of its potential dangers.
"Bayer is disappointed with the jury's decision and will appeal the verdict in this case, which conflicts directly with the U.S. Environmental Protection Agency's interim registration review decision released just last month, the consensus among leading health regulators worldwide that glyphosate-based products can be used safely and that glyphosate is not carcinogenic, and the 40 years of extensive scientific research on which their favorable conclusions are based," the company said in a statement.
"We have great sympathy for Mr. and Mrs. Pilliod, but the evidence in this case was clear that both have long histories of illnesses known to be substantial risk factors for non-Hodgkin's lymphoma (NHL), most NHL has no known cause, and there is not reliable scientific evidence to conclude that glyphosate-based herbicides were the "but for" cause of their illnesses as the jury was required to find in this case," Bayer added.
Bayer shares were marked 2.2% lower by mid-day of trading on the Deutsche Boerse in Frankfurt to change hands at €55.25 each, the lowest since June 2012 and a move that extends its year-to-date decline past 9%.
The stock's decline was held in check by investors' assumption that the $2 billion verdict will likely be reduced on appeal.
Late last year, a U.S. judge upheld a verdict against Bayer that found weedkillers sold by its Monsanto franchise caused a California man's terminal cancer, but slashed the damage payout by nearly three quarters.
A Francisco Superior Court Judge Suzanne Bolanos said Bayer would need to pay $39 million in punitive damages and a further $49 billion in compensatory damages to Dewayne Johnson, a groundskeeper who worked for the San Francisco school district, who had argued that Monsanto's '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.