Investing.com -- Shares in Bayer (ETR:BAYGN) slipped on Monday after the German conglomerate was ordered to pay $2.25 billion to a 49-year old man who claimed that he had developed cancer following exposure to its Roundup weedkiller.
Bayer confirmed that the decision, handed down by a jury in the U.S. state of Pennsylvania on Friday, included $250 million in compensatory damages and $2 billion in punitive damages. It was the biggest verdict yet delivered in some five years of litigation over Roundup, the herbicide Bayer acquired as part of a $63 billion acquisition of U.S. agrochemical firm Monsanto in 2018.
The company has said it would appeal, adding that the ruling "conflicts with the overwhelming weight of scientific evidence and worldwide regulatory and scientific assessments."
Analysts at Morgan Stanley said that while they expect the final amount will be reduced through post-trial motions, it still marks an "additional negative datapoint" in a series of court battles Bayer has faced over glyphosate, the active ingredient in Roundup.
Leverkusen-based Bayer has already indicated that it has set aside about €6 billion in provisions on its balance sheet to address the glyphosate litigation.
Roughly 165,000 cases have been brought against Bayer over alleged personal injuries caused by Roundup, with most claiming that the weedkiller led to them to develop non-Hodgkins lymphoma. As of its third quarter, 52,000 of those cases have not been either settled or litigated, according to Bayer.
"Whilst we believe these represent the largest part of the remaining liability, additional cases may be filed in the future," the Morgan Stanley analysts said.
Bayer has backed Roundup, arguing that decades of studies have shown that it is safe for humans to use. It has also vowed to continue fighting the cases despite questions raised by some investors over its legal strategy regarding the issue.
The next glyphosate trial is due to begin in Delaware early next month.