Bayer AG said that reaching its full-year forecast looks “increasingly ambitious” as bad weather threatens its agricultural division’s performance, while reporting that the number of plaintiffs in Roundup weedkiller suits increased.
- The number of suits from people claiming Roundup caused their cancer rose by about 5,000 to 18,400, the German company said in a statement. The company has forecast sales of about 46 billion euros (US$51 billion) and profit of about 6.80 euros a share.
Key Insights
- Chief Executive Officer Werner Baumann is under pressure to prove that Bayer’s dual focus on agriculture and health care makes sense after last year’s US$63 billion takeover of Monsanto Co. The surge in U.S. lawsuits alleging that Roundup -- which Bayer inherited from Monsanto -- causes cancer may make settlement of the litigation more expensive than previously thought.
- Bayer’s agriculture woes are being exacerbated by bad weather. In North America, heavy flooding has delayed planting season for farmers while trade tensions with China are hurting U.S. soybean exports. In Europe, pesticide sales struggled too, thanks to dry weather.
- Bayer’s other challenges include selling off its animal health division, rekindling growth at its long-slumping consumer-health division and coming up with promising new medicines for its pharma unit, where top-selling treatments Xarelto and Eylea both face losing patent protection next decade.
Market Reaction
- Bayer’s shares have plunged about 38 per cent in the past 12 months amid concern over legal claims that Roundup and its main ingredient glyphosate can cause cancer.
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