Bayer shares declined by 5.9 percent on Tuesday morning following a jury verdict that awarded a California couple $2 billion in compensation related to the company’s Roundup weed killer.
The jury came to the conclusion after the couple sued Bayer over claims that the company’s product caused cancer.
The outcome saw Bayer’s stock take a plunge, dropping to its lowest level ever in seven years.
Meantime, the award is set to reduce after the U.S Supreme Court limited the ratio of the punitive to compensatory damages ratio at 9:1. This will help reduce the amount awarded as compensation for punitive damages.
According to the jury, Roundup had some defects and it did not issue precautionary measures about its hazardous composites.
Bayer has said that it will appeal the jury’s verdict since they consider it unfair. Expressing their dissatisfaction, one of Bayer’s spokesperson described the jury’s verdict as exploitive and not justified.
Bayer has for the third time been faced by similar charges, losing on all three occasions. All the hearings were conducted by the U.S jury, with the same verdict of compensation given in view of the complaints.
Bayer acquired the controversial chemical component in 2018, part of a deal that saw the Aspirin inventor buy Monsanto for $63 billion.
Over 13,400 lawsuits have since been filed against the company, which also makes the Yasmin pills used for birth control.
The WHO’s Organization’s International Agency for Research on Cancer had stated in a 2015 report that glyphosate could probably cause cancer.
But in what may constitute good news, the U.S. Environmental Protection Agency released a report earlier in May confirming that it was safe to use glyphosate.
Other regulators, including the European Chemicals Agency, have also disputed the claims that the chemical is carcinogenic.
Bayer reported that demand for the herbicide by U.S. farmers is still high despite the streaming accusations from users as well as dissatisfaction from its investors. On Monday, Bayer reported that it would sell its Coppertone, the U.S.-based sun care brand at a price of $550 million to the founder of Nivea, Beiersdorf.