Bayer Shares Drop 14% After Monsato Loses $289 Million In Roundup Case

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Shares of Bayer AG have dropped after the first trial over Roundup weed killer came back with a loss of $289 million in damages. According to Bloomberg, Bayer’s shares have dropped 14%, the largest amount in seven years, after the newly acquired Monsanto Co. lost its first trial over Roundup, the company’s major product.

Monsanto was brought to trial by Dewayne Johnson, a former school groundskeeper, beginning in 2016. Johnson mixed and sprayed hundreds of gallons of Roundup for a school district in Benicia, California and was diagnosed with cancer in 2014.

Johnson underwent chemotherapy and other cancer treatments, but the treatment wasn’t effective. In July 2017, Johnson’s oncologist gave him six months to live.

Johnson’s lawyers claimed his exposure to the herbicide caused his severe non-Hodgkin’s lymphoma, a cancer of the lymph system. Johnson sought $412 million in damages against Monsanto despite being told he might not live long enough to see the end of the trial.

After a three-day deliberation, jurors awarded Johnson $39 million for his losses. The jurors also fined Monsanto $250 million after finding the company liable for a design defect in the product and failing to warn customers about Roundup’s risks.

Johnson’s lawsuit is said to be the template for Monsanto’s future litigations. The company is currently facing 5,000 other lawsuits from customers claiming the company failed to warn them of their herbicide’s potentially cancerous side effects.

Monsanto, which was bought earlier in 2018 by Bayer for $63 billion, said Roundup is safe. The company will appeal against the jury’s verdict in California.

“Today’s decision does not change the fact that more than 800 scientific studies and reviews … support the fact that glyphosate does not cause cancer, and did not cause Mr. Johnson’s cancer,” said Scott Partridge, Monsanto’s Vice President, in a statement.

Since the news of the legal battle broke, Monsanto’s market value has dropped by $11.4 billion. Markus Mayer, a Baader Bank AG analyst, says the litigations may give investors flashbacks to the Lipobay scandal in the early 2000s.

Lipobay, a cholesterol-lowering pill, was pulled from the shelves in 2001 after being linked to 52 deaths related to rhabdomyolysis, a condition that rapidly breaks down skeletal muscle.

Bayer paid over $1.1 billion to settle lawsuits surrounding Lipobay. “Investors might worry that this will become a ‘Lipobay 2.0,'” said Mayer.

The active ingredient in Roundup, glyphosate, was first approved in 1974. Since then, the question of whether the weed killer causes cancer has been debated by researchers, regulators, environmentalists, and lawyers.

There are many different factors that go into cancer development, but certain factors may escalate others. For instance, the EPA estimates that indoor air is between two to five times dirtier than outdoor air. This may cause future breathing difficulties such as asthma or lung cancer.

Lack of exercise has also been shown to increase cancer risk. Yet, today’s kids spend less than four hours playing outside a week.

Because cancer can be caused by many different factors including genetics, lifestyle, or carcinogen exposure, it’s important that adults seek out cancer screenings. A prostate-specific antigen test can save one to two lives for every 1,000 men who take the test and mammography can reduce the risk of dying from breast cancer by 20% to 40%.

Brent Wisner, Johnson’s lawyer, argued that Monsanto scientists knew about the cancer risk Roundup posed to consumers since the 1970s.

“Despite the Environmental Protection Agency’s failure to require labeling,” Wisner said, “we are proud that an independent jury followed the evidence‚Ķ”

Ulrich Huwald, a Warburg Research analysts in Hamburg, Germany, says Bayer may need to pay out settlements even if the company doesn’t face similar verdicts to the Johnson trial. “They’re going to appeal,” said Huwald, “and we’re going to have to see what happens then.”

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