Bayer is rallying after a judge slashed a payout over its cancer-linked Roundup weed killer by $55 million
- Bayer's stock climbed as much as 3% on Tuesday after a federal judge slashed a payout over its Roundup weed killer by nearly 70% to about $25 million.
- A San Francisco jury determined Roundup caused a user to develop cancer and awarded him $75 million in punitive damages. The judge cut that to $20 million after deciding the original figure was "constitutionally impermissible" as it was too high relative to the $5.3 million in compensatory damages.
- However, the judge said the conduct of Roundup-owner Monsanto, which Bayer acquired last year, was "reprehensible."
- More than 13,000 farmers, landscapers, and home gardeners have sued Bayer and Monsanto, claiming the active ingredient in Roundup, glyphosate, is unsafe.
- Watch Bayer trade live.
Shares in Bayer climbed 3% on Tuesday after a federal judge slashed the German pharmaceuticals giant's payout over its Monsanto unit's Roundup weed killer by nearly 70% to about $25 million.
A San Francisco jury determined the herbicide caused the plaintiff, Edwin Hardeman, to develop cancer and awarded him about $75 million in punitive damages. Vince Chhabria, a US district judge, cut that figure to about $20 million, determining the original amount was too high relative to the $5.3 million in compensatory damages and therefore "constitutionally impermissible," according to Reuters.
"Monsanto's conduct, while reprehensible, does not warrant a ratio of that magnitude, particularly in the absence of evidence showing intentional concealment of a known or obvious safety risk," Chhabria wrote.
Bayer took control of Roundup after it bought agrochemical giant Monsanto for $63 billion last summer. Hardeman claimed the weed killer caused him to develop non-Hodgkin's lymphoma, a cancer that affects the immune system, after he regularly used it for more than 25 years to treat poison oak and weeds in his yard. More than 13,000 farmers, landscapers, and home gardeners have sued Bayer and Monsanto, claiming Roundup's active ingredient, glyphosate, is unsafe.
The verdict and damages "conflict with both the weight of the extensive science that supports the safety of Roundup, and the conclusions of leading health regulators in the U.S. and around the world that glyphosate is not carcinogenic," Bayer said in a statement, adding that it plans to appeal.
While Bayer has successfully lowered payouts, the verdicts are piling up. In August, a jury ordered Monsanto to pay $289 million after determining it failed to warn customers of the potential cancer risks of Roundup and another weed killer, Ranger Pro. The award was cut to $78.5 million on appeal, according to the Wall Street Journal.
Bayer earned close to 40 billion euros ($45 billion) in revenue and 4 billion euros in operating profits last year. Its stock has tumbled by more than a third in the past year, slashing its market capitalization to about 60 billion euros.