Bayer’s Trial Verdict of $2.25B Penalty Causes Shares to Fall 4.5%

Bayer AG has been ordered by a Philadelphia court to pay $2.25 billion to a Pennsylvania resident who claimed he developed cancer due to the carcinogens in the company's Roundup weedkiller product. A jury in the Philadelphia Court of Common Pleas favored the man who sued the company, which means the German firm lost in the case.

Verdict's Impact on Shares

According to Reuters, the verdict handed down by the court late last week plunged Bayer AG's shares. The company was said to have opened on Monday, Jan. 29, showing a 4.5% drop.

Before this, Bayer's shares fell 5% in early trade at the Frankfurt Stock Exchange Frankfurt shortly after the company was first ordered to pay a hefty $2.25 billion compensation for damages to the Pennsylvanian man. The individual said that the exposure to the brand's Roundup weedkiller made him ill.

Awarded Compensation and Bayer's Response

The amount awarded to the complainant was said to be the highest yet in the series of ongoing cases being faced by the company for the same carcinogenic effect claims for the weedkiller product. The man has been identified as John McKivision, and the jury sided with him after the jury determined his non-Hodgkin's lymphoma was caused by the usage of Bayer's Roundup product.

XM Global reported that McKivision has been using the weedkiller for his yard work for several years. However, Sebastian Bray, a head of chemicals research from Berenberg, opined that the massive compensation may still be cut. "This is a big initial damages award, and likely negative for shares. But the award is likely to be cut on appeal, in my view," he said.

Meanwhile, as per The Straits Times, Bayer did not agree with the verdict and, in a statement, said that it would file an appeal. "With the jury's adverse verdict that conflicts with the overwhelming weight of scientific evidence and worldwide regulatory and scientific assessments, and believe that we have strong arguments on appeal to get this verdict overturned and the unconstitutionally excessive damage award eliminated or reduced," the company said.

Photo by: Michielverbeek/Wikimedia Commons(CC BY-SA 4.0)