Bayer In The Weeds

Bayer fell 10%

Image source: Shutova Elena, Sheila Fitzgerald, FabrikaSimf - Shutterstock

What's going on?

Shares of German pharmaceuticals and life sciences giant Bayer fell 10% on Wednesday after it lost the first phase of another court case related to products made by Monsanto, the American agriculture company it acquired in June for $63 billion.

What does this mean?

A US federal court jury found that exposure to the main ingredient in Monsanto’s popular weed killer, Roundup, was responsible for a California man developing cancer after almost 30 years’ regular use. Now, the case will progress on to deciding Bayer’s liability in the matter – and how wide it may have to open its checkbook for damages.

Why should I care?

For markets: Costs – and uncertainty – are piling high.

In August, Bayer/Monsanto lost a similar case – and was ordered to pay $289 million, later reduced to $79 million. Although the company’s appealing that ruling, and will likely do the same here, the risk of more fines to follow from the 11,200 other Roundup lawsuits in the pipeline probably caused investors to sell Bayer’s stock again on Wednesday. Last week, healthcare titan Johnson & Johnson’s stock also fell after it was ordered by a US court to pay $29 million to a woman who claimed chemicals in the company’s talcum powder caused her cancer. It, too, plans to appeal the ruling – as it’s doing with the $5 billion in related damages it was ordered to pay last year.

For you personally: Companies can be held to account.

Investors and customers can put pressure on companies to take a bigger stand on issues like climate change and unethical labor practices, although greater numbers are needed – inevitably, these issues aren’t top of mind for all firms. Customers can show their disapproval with their wallets, and investors by adopting a “socially responsible” investment approach. Government institutions do their part too, and not just in the US: the European Union hit Google with a third multi-billion-dollar fine for abusing its market dominance on Wednesday.

Originally posted as part of the Finimize daily email.

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