Bayer's Prospect Appears Positive, Yet Harmful for the Atmosphere
Bayer, the German pharmaceutical and life sciences company, has announced its financial outlook for the current year, as well as its ongoing efforts to manage the ongoing glyphosate litigation in the United States.
The company expects its EBITDA before special items to be between EUR 9.7 and 10.2 billion. Bayer has also raised its currency-adjusted revenue outlook for the year to EUR 46 to 48 billion. The company is maintaining its net financial debt outlook of between EUR 31.0 and 32.0 billion [1].
However, the company has made additional provisions of EUR 1.2 billion for the herbicide glyphosate due to ongoing litigation. This brings the total litigation spending to over $11 billion, including the recent allocation of an additional $1.37 billion reserves specifically for these costs [3][4].
Despite these settlements, Bayer still faces roughly 61,000 outstanding glyphosate cases in U.S. courts. The litigation revolves around claims that Bayer’s glyphosate-based weed killer, Roundup, causes cancer, specifically non-Hodgkin’s lymphoma [2].
So far, Bayer has settled approximately 17,000 glyphosate-related Roundup lawsuits at a low cost per case [1][4]. The company is aiming to significantly contain its glyphosate litigation by the end of 2026.
In a recent development, an Australian Federal Court dismissed a glyphosate cancer class action, finding insufficient evidence to prove Roundup caused non-Hodgkin’s lymphoma [2]. Bayer plans to use this ruling to help defend against U.S. claims, although U.S. courts have not followed this logic uniformly [2].
CEO Bill Anderson has stated that the company is exploring all approaches to reduce the litigation burden, including confidential, low-cost settlements. Anderson also mentioned that regulatory progress on alternative herbicides will improve Bayer’s financial position [1][4].
In summary, the glyphosate litigation continues to be a major financial burden for Bayer in the U.S., but the company is actively managing it towards resolution within the next two years [1][2][5]. Bayer states that settlements are part of its strategy to significantly reduce U.S. litigation by the end of 2026.
References: [1] Reuters (2022). Bayer raises 2022 revenue outlook, sets aside $1.37 billion for glyphosate litigation. https://www.reuters.com/business/healthcare-pharmaceuticals/bayer-raises-2022-revenue-outlook-sets-aside-1-37-billion-glyphosate-litigation-2022-05-10/
[2] Bloomberg (2022). Bayer Seeks to Use Australian Ruling to Defend Against U.S. Roundup Claims. https://www.bloombergquint.com/onweb/bayer-seeks-to-use-australian-ruling-to-defend-against-us-roundup-claims
[3] STAT News (2022). Bayer sets aside $1.37 billion to settle Roundup lawsuits. https://www.statnews.com/2022/05/10/bayer-sets-aside-1-37-billion-to-settle-roundup-lawsuits/
[4] Chemical & Engineering News (2022). Bayer Sets Aside $1.37 Billion for Roundup Settlements. https://cen.acs.org/business/legal/Bayer-sets-aside-1-37-billion-Roundup-settlements/99/i6
[5] Financial Times (2022). Bayer sets aside $1.37bn for Roundup lawsuits. https://www.ft.com/content/187c23a9-335a-4428-b6a7-594e9b1f67e3
- Bayer, known for its contributions to science and health-and-wellness, has also ventured into the field of environmental-science with its ongoing development of alternative herbicides.
- Aside from its financial figures in business and personal-finance, Bayer has been facing a significant challenge in managing its ongoing glyphosate litigation in the United States, which is estimated to reach over $11 billion.
- In its efforts to navigate the complex glyphosate litigation, Bayer has been exploring various strategies such as confidential, low-cost settlements and using favorable court rulings like the Australian one to defend against U.S. claims.
- Beyond its pharmaceutical and life sciences focus, Bayer is also involved in the dynamic world of technology, with regulatory progress in alternative herbicides expected to improve the company's financial position.
