Bayer's stock surges after U.S. appeals court strikes down Roundup cancer case

By Louis Goss

Bayer AG shares surged up to 12% Friday on news it had won a key victory in a U.S. court that should limit its liability in relation to a series of lawsuits over claims that the popular weed killer Roundup causes cancer.

The Third Circuit, based in Philadelphia, ruled in Bayer's favor in a case brought forward by Pennsylvania landscaper David Schappner, who claimed he developed non-Hodgkin lymphoma after using Roundup.

The court said that U.S. federal laws supersede Pennsylvania laws when it comes to regulating warning labels, meaning Bayer should be shielded from claims it failed to warn Roundup users adequately about cancer risks.

Shares in Bayer (XE:BAYN), listed on the Frankfurt Stock Exchange, were up 11% on Friday. The company's stock has fallen 43% over the previous 12 months.

Roundup was first developed by chemicals company Monsanto in 1973. The company, based in Missouri, was acquired by Bayer for $63 billion in 2018.

Bayer's acquisition saw the German pharmaceutical giant become liable for lawsuits related to claims Monsanto had failed to properly warn customers that using Roundup might increase their risk of developing cancer.

The German company has faced over 165,000 claims from Roundup users after the International Agency for Research on Cancer classified glyphosate, which is used in the weed killer, as "probably carcinogenic to humans" in 2015.

The U.S. Environmental Protection Agency subsequently said there is no evidence that glyphosate causes cancer in humans and said the chemical is unlikely to be a carcinogen.

In 2020, Bayer agreed to settle the majority of Roundup lawsuits that had been filed against the company for $10.9 billion without admitting any liability or wrongdoing.

-Louis Goss

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08-16-24 0751ET

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