Why Bayer made a splash on the stock market
Difficult start to the week for the German company Bayer, which yesterday saw its shares fall by 16.4% on the stock market. This is the worst decline in the last 12 years. Here's what happened
A 1.5 billion conviction in the United States for a herbicide accused of causing cancer and the halt to the testing of an anticoagulant drug caused the giant Bayer to record the worst collapse on the stock market yesterday morning (-16.4%) of the last 12 years .
And the future could also hold unpleasant surprises…
THE LATEST SENTENCE TO THE ROUNDUP HERBICIDE
A Missouri jury ordered Bayer to pay more than $1.5 billion to three people who attributed their cancers (non-Hodgkin's lymphomas) to years of using the herbicide Roundup on their lawns and gardens. The product, Bloomberg notes, has recently been hit by a wave of verdicts, but this is “one of the largest trial losses in the five-year-old herbicide controversy,” as well as “one of the largest damages awards inflicted this year on a American company."
Bayer, however, says it has "strong arguments to have the recent verdicts overturned," which it calls "unfounded" because it believes judges have allowed former Roundup users to mischaracterize regulatory decisions governing the safety of the drug. product.
According to Bloomberg , it is likely that the compensation will eventually be reduced, as happened in 2019, when after a California jury awarded a couple more than $2 billion in damages while still holding Roundup responsible for their cancers, the compensation was finally reduced at 87 million dollars.
Two years ago, the company set aside about $16 billion ($ 10 billion of which has already been paid ) to settle more than 150,000 Roundup-related lawsuits and faces additional lawsuits in Arkansas and Delaware in the coming months.
ROUNDUP AND GLPHOSATE
The main ingredient of Roundup is under attack: glyphosate, which has been debated for years . For the plaintiffs, Bloomberg writes, officials at Monsanto – acquired by Bayer in 2018 for $63 billion – knew that some researchers had found it was carcinogenic and that the company tried to cover up those studies.
The German giant defends itself by stating that the United States Environmental Protection Agency continues to consider both Roundup and glyphosate safe and that, indeed, a federal appeals court recently rejected Bayer's requests to include it on the product safety warnings. In the meantime, however, the company has decided to switch to a new version of Roundup in the US market by the end of the year, which includes new ingredients instead of glyphosate.
THE FLOP OF THE ANTICOAGULANT DRUG
But yesterday's fall on the stock market was also due to the failure of the trial, already in an advanced stage, of Asundexian – an anticoagulant for the prevention of stroke and systemic embolism in high-risk patients – which did not demonstrate positive effects.
Bayer has made it known that another study for the prevention of stroke will continue with this drug but for analysts the market opportunity is smaller. Previously, the company had in fact estimated that Asundexian could generate sales of up to 5 billion euros per year , or a quarter of the group's entire pharmaceutical turnover for 2022. A result that should also compensate for the deadline in the coming years of the patents of two of its best-selling drugs , Xarelto and Eylea.
The setback to Asundexian's trial also risks ruining Bayer's expansion plans in the United States, the world's largest pharmaceutical market.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/perche-bayer-ha-fatto-splash-in-borsa/ on Tue, 21 Nov 2023 11:27:32 +0000.