Years after the Monsanto deal, Bayer’s Roundup Bills continue to pile up

Three years after Bayer agreed to pay $10 billion to settle claims that its weedkiller, Roundup, caused cancer, juries continue to award plaintiffs in additional cases billions of dollars in damages, even as the German drug and chemicals giant continues to maintain its fight in the fight against cancer will continue. court.

Over the past two months, juries in four separate cases have awarded more than $2 billion in damages on a handful of approximately 50,000 claims that were not covered by the 2020 settlement. The $10 billion deal is one of the largest in history.

Bayer has set aside another $6 billion, which the company says is enough to cover ongoing lawsuits and potential future lawsuits. But analysts and investors fear Bayer could pocket billions more, putting the future of the 160-year-old company in jeopardy.

Some of the nation’s most high-profile plaintiffs’ lawyers — including a team that won an estimated $1 billion settlement from Johnson & Johnson in 2021 over the antipsychotic drug Risperdal — are representing thousands of individuals seeking damages from Bayer. Plaintiffs have at least a dozen cases lined up in the coming months.

“Plaintiffs are on a winning streak,” said Nora Freeman Engstrom, a professor at Stanford Law School who studies mass torts. The recent cases, Ms. Engstrom said, do not bode well for Bayer, because plaintiffs’ lawyers can pull testimony from past testimony and build stronger cases over time. “With every lawsuit, the playing field subtly shifts to the plaintiffs,” she added.

Bayer has said that Roundup does not cause cancer. Company executives told The New York Times they will continue to litigate and fight to overturn the four recent verdicts or reduce jury amounts, noting that the final awards in previous cases were significantly lower.

“The company will not incentivize the plaintiffs’ law firm business model through mass settlements of 1,800 files that have no value whatsoever,” Nicole Hayes, a spokeswoman for Bayer, said in a statement. “Instead, we will continue to adjudicate cases because decades of science and global regulatory reviews continue to support the safety and non-carcinogenicity of Roundup.”

Bayer’s troubles stem from its 2018 purchase of Monsanto, the maker of Roundup, for $63 billion in cash. Since the deal was announced in 2016, Bayer’s shares have fallen more than 60 percent. It is widely considered one of the worst mergers in history.

After the most recent verdict in mid-November, in which a Missouri jury awarded three plaintiffs $1.5 billion in damages, Bayer’s shares fell even further, dropping its market capitalization to about $33 billion, or less than half of what it was before Monsanto paid.

Shareholders have been pushing Bayer to undo the merger almost since it closed, mainly because of its exposure to Roundup lawsuits.

“Shareholders are really fed up,” said Marco Taricco, founder and co-chief investment officer of Bluebell Capital Partners, a London-based activist shareholder that bought a stake in Bayer last year. After the recent jury verdicts and a failed late-stage pharmaceutical trial in November for what was expected to be a promising drug, “there is more pressure on the company to make structural changes,” Mr. Taricco said.

In June, at the insistence of investors, Bayer installed a new CEO, Bill Anderson. Last month, Mr. Anderson said he would consider several options to improve the company’s performance, including spinning off or selling the company’s crop science business, which includes Roundup.

Monsanto began using the chemical glyphosate, the main ingredient in Roundup, to kill weeds in the 1970s. However, it wasn’t until the company developed genetically modified seeds in the late 1990s that Roundup became the dominant herbicide. The GMO seeds were immune to Roundup, so farmers could spray it on fields, killing the weeds but not the crops. Monsanto went on to build a massive global company by controlling the so-called glyphosate platform for both the herbicide and the seeds resistant to it.

Bayer’s determination to fight and settle lawsuits related to Roundup underscores the importance of the herbicide to its business. Through the first nine months of 2023, most of Bayer’s crop sciences business’ roughly $19 billion in revenue came from the ecosystem built around Roundup.

Bayer said in a statement that glyphosate-based herbicides are “vital to agriculture, sustainability and the ability to produce enough food to feed the world’s growing population.”

When Werner Baumann, then Bayer CEO, announced plans to buy Monsanto in September 2016, it was partly a defensive move. Last year, Dow Chemical agreed to merge with DuPont. In February 2016, Swiss pesticide giant Syngenta announced a deal with China National Chemical Corp.

But Bayer underestimated the risk to its business from Roundup’s legal troubles. In 2015, the International Agency for Research on Cancer, a division of the World Health Organization, classified glyphosate as “probably carcinogenic to humans.”

Robin Greenwald, a partner at law firm Weitz & Luxenberg who filed one of the first Roundup cases in 2015 after the WHO announcement, said she had no idea at the time how big the lawsuit would become. “People thought it was expensive and risky to take this on,” Ms. Greenwald said.

Her cases were merged into a larger group that eventually led to a federal judge ruling in July 2018 — just a month after the Bayer deal closed — that there was sufficient evidence that Roundup could cause cancer, based on testimony and documents of scientists and doctors.

That ruling opened the door to thousands of additional lawsuits. In August 2018, a jury awarded a California man nearly $300 million in damages for Roundup’s role in causing his cancer, saying the company should have known about the potential risks to consumers.

After losing several more lawsuits, Bayer agreed to a $10 billion settlement with thousands of plaintiffs in 2020 while retaining the right to sell Roundup without having to issue a cancer warning about the herbicide and its products. Bayer went on to win nine consecutive cases against plaintiffs, while also settling numerous other cases for undisclosed amounts.

But in October, Bayer lost three lawsuits, with juries in St. Louis, Mo., San Diego, California and Philadelphia awarding more than $500 million in collective damages to plaintiffs who said Roundup caused their cancer. And last month, the jury in Missouri awarded the $1.5 billion prize. (In many cases, judges then reduce the damages awarded to plaintiffs from the original jury figure.)

In one of the four cases, a jury awarded the plaintiff $175 million in damages. Tom Kline, one of the plaintiffs’ attorneys, said documents and testimony showing that Monsanto spent 50 years developing a product it knew was dangerous helped convince the jury.

“They had to admit what a responsible chemical company would do,” said Mr. Kline, a partner at Kline & Specter who represented the plaintiff along with co-counsel Jason Itkin of Arnold & Itkin. “We have proven by the facts that they did the opposite over a long period of time.”

The two attorneys are known for winning substantial verdicts or settlements against major corporations, including Merck and the energy company Motiva. In 2019, Mr. Kline and Mr. Itkin won an $8 billion jury verdict against Johnson & Johnson for a man who claimed the drug Risperdal caused men to grow breasts. The amount was later reduced, but the company ultimately settled with numerous plaintiffs for approximately $1 billion.

Mr. Kline and Mr. Itkin’s next Roundup case is expected to go to trial in early January in Philadelphia.

Bayer’s determination to fight new cases is prompted by the ambiguity surrounding the science linking Roundup to cancer.

After the WHO unit classified glyphosate as “probably carcinogenic to humans” in 2015, the Environmental Protection Agency decided concluded that there was “no evidence” that glyphosate caused cancer. In late November, the European Commission said glyphosate could remain on the market for the next decade, subject to certain restrictions.

Ms. Hayes, the Bayer spokeswoman, said that the jury in Mr. Kline’s case – as in the other three cases – was presented with incorrect information about the EPA and the EU’s position on glyphosate safety, making it appear as if the agencies considered it dangerous.

Bayer is pursuing avenues other than direct lawsuits, hoping to get a Supreme Court ruling or a bill passed in Congress that would effectively end future cases against Roundup. So far, those efforts have not been fruitful. At the same time, Bayer is facing lawsuits related to its other activities, including a lawsuit over toxic chemicals or polychlorinated biphenyls (PCBs) in its water supply.

Damien Conover, an analyst at investment firm Morningstar, said he was concerned about the extent to which the ongoing litigation and costs would hurt Bayer’s overall business. “It will likely weigh on Bayer’s ability to invest in the company and invest in innovation.”