(Bloomberg) -- An Australian court rejected claims that Bayer AG’s weedkiller Roundup causes the cancer known as non-Hodgkin’s lymphoma, a blow to efforts to bring class-action litigation there on the matter, even as the German company contends with thousands of similar claims in the US.
The Federal Court of Australia sided with Bayer in Thursday’s judgment, finding there was insufficient evidence that the herbicide increased the risk of developing the disease or caused it directly. The lead claimant was 41-year-old Kelvin McNickle, who repeatedly used Roundup on a rural property north of Sydney and was diagnosed with non-Hodgkin’s lymphoma in 2018.
The decision is a boost for Bayer, whose Chief Executive Officer Bill Anderson is looking to win back the faith of investors. Bayer inherited a mountain of legal woes in 2018 with its $63 billion acquisition of Monsanto. The Roundup litigation has overwhelmingly played out in the US, where Bayer, as of this past winter, had already spent about $10 billion of the $16 billion it’s set aside to resolve more than 110,000 cases.
“Monsanto has prevailed,” Justice Michael Lee said, reading out extracts from his more-than 300-page judgment on the court’s YouTube channel. Still, he said the science on the matter “is not all one way.”
A spokesman for law firm Maurice Blackburn, which represented McNickle, said it was reviewing the court’s decision. Bayer said in a statement it’s committed to “ensuring safe-for-use and effective products such as Roundup continue to be available” in Australia.
The ruling should be a small positive for Bayer’s stock, since it appears to eliminate most of the potential legal problems in Australia, Sebastian Bray, an analyst at Berenberg, said by email. “Investors will be pleased at avoiding another set of legal issues,” Bray said.
Bayer insists Roundup is safe. While it has lost a half-dozen jury trials in the US on the matter, with damages exceeding $4 billion in all, it’s managed to get much of that financial burden reduced in post-trial proceedings. All told, Bayer has won 13 of the last 19 cases in the US where judgments were entered.
Even so, Bayer has struggled to put the litigation to rest. In recent months, it has even contemplated whether to use a controversial legal maneuver known as the Texas Two-Step bankruptcy to try to resolve tens of thousands of outstanding claims in the US, Bloomberg News has reported.
Bayer’s shares are down more than 70% since the Monsanto deal closed, wiping out more than $60 billion in market value.
(Adds analyst comment in sixth paragraph.)
©2024 Bloomberg L.P.
