The shares of German life sciences giant Bayer fell by more than 7% on Tuesday following a US Court’s decision to review an action against Monsanto – a subsidiary Bayer acquired in 2018.
The lawsuit involves claims that exposure of polychlorinated bisphenyls, used in Monsanto’s products, has caused harm to students and staff members at a Washington State school.
This is just one of many legal battles Bayer has with Monsanto over its legacy products. Bayer is under financial pressure due to the ongoing litigation, as its stock has already fallen 13% in this year.
The case revolves about claims that exposure to Monsanto’s PCBs at Sky Valley Education Center, Washington State, caused harm to multiple individuals.
In May, an award of $185 million was overturned by the appeals court after it found errors in the trial proceedings. This included concerns about the scientific validity and reliability of the plaintiff’s testimony.
PCB exposure claims
The company’s acquisition of Monsanto in 2018 has led to a number of challenges, including Bayer’s involvement with the PCB case.
Monsanto produced PCBs as industrial materials until 1977, when the company voluntarily stopped production.
Bayer has suffered significant financial losses as a result of the legal repercussions from Monsanto products, such as PCBs and Roundup (the controversial weed killer).
In May, an appellate court reversed a $185 million award originally granted to the plaintiffs citing errors during the trial.
The plaintiffs, however, have continued to push for a re-examination of the case, which led to the Washington Supreme Court making the decision to do so.
Bayer responded by reiterating that the claims were unfounded. It argued that the appellate courts decision had already highlighted the key errors in plaintiffs’ arguments.
Monsanto litigation
Bayer’s purchase of Monsanto led to a number of lawsuits filed in the US. These lawsuits mainly focused on the alleged risks associated with the products.
The most prominent of these cases has been the litigation surrounding the widely used herbicide Roundup which has been linked with cancer in multiple cases.
Bayer is still facing legal challenges despite a $10.9 billion settlement reached in 2020 that covered approximately 125,000 Roundup claims.
The financial and reputational fallout of Monsanto-related lawsuits persists. While Bayer won a legal victory when the 3rd US Circuit Court of Appeals ruled that Monsanto did not violate state law by failing include a cancer warning in Roundup products in September, there is no basis to claim that Monsanto violated the law.
Bayer’s stock is under constant pressure. Its share price fell by more than 30 percent in the last year. The ongoing lawsuits are a major factor in its performance struggles.
Source: Google Finance
The Washington Supreme Court’s review of the PCB exposure case is another hurdle for Bayer in its legal quagmire involving Monsanto legacy products.
Although Bayer is confident in its legal position the financial burden of the cases continues to weigh on the company’s shares, raising concerns over its long-term recovery prospects.
This post Bayer shares drop 7% as US courts reconsider Monsanto PCB case may be updated as new developments unfold.
