Bayer Wins Crucial Court Case and Share Price Soars

Shares of life sciences company Bayer surged 11% after a legal victory related to its Roundup weed killer product. The 3rd U.S. Circuit Court of Appeals in Philadelphia overturned a lower court’s decision that Bayer did not properly disclose the cancer risks associated with the herbicide.

The Federal Insecticide, Fungicide, and Rodenticide Act requires nationwide uniformity of product labeling, which prohibits Bayer from adding a cancer warning to Roundup packaging, according to Chief Judge Michael Chagares. The decision reverses a previous verdict that under Pennsylvania law, Bayer should have warned consumers about the cancer risks. The case will likely influence the outcome of other pending state law cases.

The plaintiff in the case, David Schaffner, was diagnosed with non-Hodgkin’s lymphoma in 2006. In 2019, he filed a lawsuit against Monsanto, the maker of Roundup, which was purchased by Bayer in 2018. The case alleged the cancer was caused by long-term exposure to Roundup and the company failed to provide adequate warning.

While this is a legal victory for Bayer, the win might be short-lived. After the Philadelphia court’s decision, Bayer noted that the ruling contradicts what other federal appeals courts have concluded, opening up the possibility that the U.S. Supreme Court may take a look at the case.

While Bayer contends the main ingredient in Roundup, glyphosate, is safe, the company has paid out nearly $11 billion to settle similar cases. However, there are still over 50,000 unresolved claims.

In another Pennsylvania case, plaintiff John McKivison alleged Roundup caused his blood cancer. Bayer lost the case and was ordered to pay over $2 billion. However, the state’s highest court cut the settlement to $400 million.

Over the past year, Bayer shares have dropped nearly 49%. The recent court ruling and bump in stock price could be a good sign for investors, who have been subjected to substantial losses ever since Bayer made the move to buy Monsanto.