Bayer To Invest 5 Billion Euros In Weedkiller Research
Zacks Investment Research | Jun 17, 2019 06:13AM ET
Bayer (DE:BAYGN) AG (OTC:BAYRY) announced that it will invest 5 billion euros in developing new weedkillers. The company is taking this measure in order to deal with the fallout from lawsuits claiming its glyphosate-based weedkillers, Roundup and Ranger Pro, cause cancer.
The company is advancing toward integrating its acquired agriculture business, and starting to implement a number of measures to drive transparency and sustainability across its business. Glyphosate will play a significant role in agriculture and in Bayer’s portfolio. The company intends to offer more choices to growers and thus is making an investment in weedkiller research. The company will also enhance partnerships with weed scientists around the world to develop customized solutions for farmers at a local level.
Shares of the company decreased 51.1% in the past year against the industry’ s growth of 17.6% as lawsuits claim that Bayer’s glyphosate-based products manufactured by its subsidiary, Monsanto (NYSE:MON), cause cancer.
In March 2019, a jury awarded around $5 million in compensatory and $$75 million in punitive damages to a plaintiff, who claimed that a Monsanto’s weedkiller Roundup caused his non-Hodgkin lymphoma (NHL).
Last August, Monsanto was ordered by the California state jury to pay $289 million in damages over alleged links between its Roundup weedkiller and cancer.
The lawsuit began when a school groundskeeper, who was diagnosed with terminal cancer, stated that the cause of his cancer was Monsanto's herbicide Roundup. Jurors in California superior court agreed that the product contributed to the groundskeeper’s cancer and the company should have provided a label warning of the potential health hazard.
Bayer has been consistently stating that glyphosate-based products are completely safe to use and does not cause cancer. The company has stated in the past that decades of scientific studies have shown the chemical to be safe for human use.
However, there have been debates by the environmentalists, regulators, researchers and lawyers about whether Roundup causes cancer.
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Bayer currently has a Zacks Rank #3 (Hold).
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