Bayer AG Says 1900 More Plaintiffs Suing Over Last Three Months

Bayer AG on Wednesday said the number of plaintiffs suing the German company over its weed killers had risen by another 1,900 over the last three months. The legal battle has cast a cloud over the chemicals and pharmaceuticals group's prospects that analysts say could take months, if not years to dissipate. Bayer said as of late January it faced a total of 11,200 plaintiffs claiming weed killers containing the chemical glyphosate cause cancer, compared with 9,300 at the end of October. Bayer has rejected the allegations, arguing that there are numerous studies that demonstrate the safety of glyphosate and its products. "We have the science on our side and will continue to vigorously defend this important and safe herbicide for modern and sustainable farming," Chief Executive Werner Baumann said. The latest increase in plaintiffs coincides with the second such case starting trial this week in what is set to be a yearslong fight for Bayer to try to clear its name and the most expensive acquisition in its 155 year-old history. Bayer splashed out $63 billion last year to transform itself into the world's largest maker of seeds and pesticides from a predominantly pharmaceuticals company by acquiring U.S. agriculture giant Monsanto Co. But the company has been scrambling to win back investors' trust since that takeover also plunged it into a large and potentially costly legal battle over the world's most widely used herbicide. Bayer's share price has been caught in a downward spiral, losing some 30% since Monsanto in August lost the first case on trial, despite a judge later reducing the jury award to $78.5 million from $289.2 million. Bayer is appealing the verdict. Seven trials are currently scheduled for 2019, the company said Wednesday. While all eyes are on the court cases as analysts and investors look for more clarity on the outcome of the litigation, Bayer is busy implementing a sweeping restructuring plan to shore up its finances and fix problems the company has been facing in its other divisions, namely pharmaceuticals and consumer health. Bayer swung to a net loss of EUR3.92 billion ($4.46 billion) in the fourth quarter from a profit of EUR148 million a year ago, due mainly to EUR3.3 billion in impairment charges and write-offs for consumer health brands the company is in the process of selling and a pharmaceuticals plant in Germany they are closing, which were flagged late last year. Costs to finance the Monsanto acquisition also weighed down net profit. Sales in the quarter rose to EUR11.06 billion from EUR8.6 billion a year ago. Sales were boosted by the integration of Monsanto into the crop-science division as well as pharmaceuticals and animal health while consumer health still dragged. Bayer in November announced plans to cut 10% of its global workforce, sell its animal health unit and underperforming consumer brands Dr. Scholl's foot care and Coppertone sunscreens. Management said the plans have nothing to do with the glyphosate lawsuits but people familiar with the company say the plan is also a way to demonstrate that the company has its operational business under control. Shares in Bayer rose in early trade Wednesday as analysts said sales beat expectations. Analysts however predict shares will remain under pressure until more cases have been tried in court to give a sense of how big a financial burden the litigation could or couldn't become for Bayer. Analysts say the current share price assumes a negative outcome of the litigation, with total costs projected to reach somewhere between EUR5 billion and EUR10 billion. Bayer hasn't booked provisions for potential plaintiff payouts for defense costs.