Dark days for Bayer (-18%): Failure of key drug and loss of compensation dispute

Bayer’s shares suffered the biggest drop in history today, the company lost less than 8 billion euros in market value. This comes after the announcement of a failure in the legal dispute over damages in the case of Roundup and the simultaneous termination of clinical trials of the key drug due to lack of effectiveness. The company’s shares fell as much as 19% to their lowest level in more than a decade in Frankfurt trading. The developments add to the pressure on the firm’s CEO Bill Anderson, who took over as CEO in June and said this month he was considering splitting up the pharmaceutical and agricultural conglomerate.

The German company said on Sunday it had ended late-stage trials of the antithrombotic drug asundexian – a therapy billed as a potential commercial blockbuster – due to lack of efficacy. “Asundexian has been the pearl of Bayer’s pharmaceutical portfolio,” said Markus Manns, portfolio manager of Union Investment and its shareholder.

The experimental drug asundexian was expected to boost growth after current best-sellers Xarelto and Eylea lose patent protection in the coming years. An independent panel found that the treatment is not as effective as it should be in preventing stroke and systemic embolism in patients with a form of abnormal heart rhythm called atrial fibrillation. The indication accounted for about 4 billion euros of the estimated 5.5 billion euros of peak sales for the drug, Thibault Boutherin and his colleagues at Morgan Stanley said on Monday. They described the decision of the study as “significantly negative”.

Bayer will pursue another trial of asundexian for stroke prevention, although the market opportunity is smaller, analysts noted. It will also have to decide whether to proceed with the test in older patients, they said.

Bayer has to pay $1.6 billion in compensation for RoundUp, according to a US court

According to a court in the US state of Missouri, the German group Bayer has to pay compensation in the amount of 1.56 billion dollars for health problems that arose in connection with the use of RoundUp. The court granted the request of several plaintiffs, Reuters writes. The company can appeal against the judgment.

The court ruled in favor of the three plaintiffs who suffer from blood cancer. According to them, it was created precisely because of the use of RoundUp, which they used in gardening. The court awarded the three plaintiffs $61.1 million in compensatory damages and $1.5 billion in punitive damages. This compensation can be reduced by the Court of Appeal if it is not in accordance with the rules laid down by the Supreme Court. The wife of one of the plaintiffs is also to receive compensation in the amount of 100,000 dollars.

Bayer claims that studies conducted in recent decades show that RoundUp and its active ingredient glyphosate are safe for human health. However, this is the fourth defeat in a row in this type of case for the German company in American courts. Before that, however, she won nine disputes, writes Reuters. The firm said in a statement that it has strong arguments to help it overturn unfavorable rulings in appeals courts.

Bayer “won” the RoundUp lawsuits by acquiring the American chemical company in 2018 that produced the drug. In 2020, the company settled most of the drug disputes, costing it nearly $11 billion.

A few days ago, the European Commission announced that it will extend the license to use the pesticide glyphosate for another ten years, after the representatives of the member states did not agree on this issue again.

Source: Bloomberg, čtk, patria.cz