Why Bayer investors are worried despite the reduction in sentence

In August, a jury in San Francisco fined Monsanto $ 289 million. Dewayne "Lee" Johnson, who was suffering from lymphoma, had sued. Lay judges found that it was proven that Monsanto's products derived from glyphosate were carcinogenic and the manufacturer did not give sufficient warning and concealed the risks. Monsanto had already appealed and asked that the case be renegotiated for lack of evidence.

The Johnson case is particularly volatile because it is the first judgment that could guide the many other lawsuits. His case had been advanced because of the seriousness of the claimant's illness. Formerly a California wizard, Johnson has been using products containing glyphosate such as Roundup and Ranger Pro from Monsanto for years, accusing the company of suffering from lymphoma.

Johnson must now decide before December 7 when he agrees to pay $ 78 million. If he does not, Bayer may request a new trial.

The decision to reduce the penalty is both a success for Bayer and a defeat. Because contrary to what she had said in her opening remarks three weeks ago, the competent judge, Suzanne Bolanos, did not completely overturn the jury verdict in August. In principle, it has indirectly confirmed that a link between weed treatment and cancer can be imposed in court.

At a preliminary hearing, Bolanos had expressed serious doubts about the proportionality of the sum imposed in August. The judge also had the idea to completely remove the damage, as no evidence was presented during the proceedings, Monsanto employees would have ignored the evidence of an alleged risk of cancer related to the weed killer. On Monday, Bolanos has now returned and confirmed the jury's previous verdict.

In her explanations, the judge said that in the end, despite some doubts, it was not up to the court to judge this question, but to the jury. In other words, the court's ability to overturn the decision of such a jury was limited from the outset.

The court's significant reduction of punitive damages was "a step in the right direction", but Bayer was still convinced that the verdict was at odds with the evidence presented during the process, the Dax group in Leverkusen said Tuesday. Monsanto and Bayer mention "more than 800 scientific studies, the US Environmental Protection Agency (EPA), the National Institutes of Health and their supervisors around the world," which indicate that glyphosate does not present no risk of cancer.

The question of whether the best-selling Roundup actually causes cancer is very controversial. The International Agency for the Evaluation of Cancer of the World Health Organization (WHO) has clbadified the 2015 weed killer as "likely to cause cancer" for humans.

Bayer must now be ready to face the growing number of glyphosate-related lawsuits. By the end of August, this figure was already 8,700. According to experts, appeals to the California Supreme Court could take up to two years. The resulting uncertainty will still weigh on the Leverkusen-based group's stock market and its valuation.

Shortly after the market opening on Tuesday, the Bayer share lost more than 8.3% and is therefore the worst value of the Dax. More recently, it was down 7.2%. Many investors may have insisted that the process be reopened and thus disappointed in the verdict.

With agency material