Tag Archives: Bayer

Bayer puts part of Roundup settlement on hold

FRANKFURT (Reuters) – Bayer <BAYGn.DE> has agreed to delay part of a proposed settlement of allegations that its widely used weedkiller Roundup caused cancer after a U.S. judge questioned its plan to deal with future claims.

The German company said on Wednesday that lawyers representing those preparing a class action had withdrawn a request for court approval of the $1.25 billion scheme, part of a broader $10.9 billion agreement to settle close to 100,000 U.S. lawsuits related to Roundup.

The move would give the parties more time to address questions raised by Federal District Court Judge Vince Chhabria of the Northern District of California who presides over the federal Roundup litigation, Bayer said in a statement.

“Bayer remains strongly committed to a resolution that simultaneously addresses both the current litigation on reasonable terms and a viable solution to manage and resolve potential future litigation”, it added.

It declined to comment on the impact of the withdrawal on the timetable for the rest of the settlement.

Bayer is seeking to end legal disputes it inherited with its $63 billion takeover of Monsanto in 2018.

Bayer shares were down 1.2% by 1307 GMT.

On Tuesday, Bayer shares had fallen more than 6% after Chhabria said that the court was inclined to oppose the part of the proposed settlement that deals with future claims. The case was due to be considered again on July 24.

Bayer had planned to create an independent panel of scientific experts to help assess whether glyphosate caused cancer.

But in a filing published on July 6, Chhabria had questioned the idea of delegating the decision from judges and juries to a panel of scientists.

Chhabria also questioned whether potential claimants would want to remain bound by a ruling reached by the proposed scientific panel if research is still ongoing.

Regulators including the U.S. Environmental Protection Agency and the European Chemicals Agency, have determined glyphosate to be non-carcinogenic, supporting Bayer’s claim that the active ingredient in its Roundup product is safe for agricultural use.

However, in 2015, the World Health Organization’s cancer research arm determined the herbicide to be a “probable carcinogen”, and since 2018, three consecutive U.S. juries, who listened to scientific evidence from both sides during trials, found that Roundup causes cancer.

(Reporting by Arno Schuetze; Editing by Keith Weir)

Los Angeles County sues Bayer’s Monsanto over PCB contamination in water

FILE PHOTO: Logo of Bayer AG is pictured at the annual results news conference of the German drugmaker in Leverkusen, Germany February 27, 2019. REUTERS/Wolfgang Rattay/File Photo

By Jonathan Stempel

(Reuters) – Los Angeles County sued Monsanto Co on Thursday, seeking to force the unit of Germany’s Bayer AG to help pay for reducing PCB contamination in dozens of bodies of water.

The most populous U.S. county, which has about 10.1 million people, said the presence of polychlorinated biphenyls (PCBs) in products sold by Monsanto many decades ago has caused widespread environmental contamination, forcing it to spend money to retrofit its stormwater systems and prevent further damage.

Los Angeles County said Monsanto had long concealed its knowledge that PCBs were harmful, and created a public nuisance because their presence interferes with commerce, fishing, navigation, swimming and other water-based activities.

Bayer did not immediately respond to requests for comment.

It said in its annual report in February that it had “meritorious defenses” against PCB-related claims.

Los Angeles County is seeking compensatory and punitive damages in its complaint filed in Los Angeles federal court.

It joined many other U.S. municipal entities to sue Monsanto over PCBs. Lawyers for the county did not immediately respond to requests for comment.

The lawsuit adds to Bayer’s legal problems relating to Monsanto, which it bought last year for $63 billion.

Bayer also faces claims by more than 13,400 plaintiffs that Monsanto’s Roundup weed killer causes non-Hodgkin’s lymphoma, and that Monsanto concealed the link.

A jury in Oakland, California, on May 13 awarded $2.055 billion to a couple who said Roundup caused their cancer, though that award will likely be reduced. Bayer has said Roundup is safe, and that several health regulators worldwide agree.

PCBs were once used widely to insulate electrical equipment, helping reduce fire risk, and were also used in such products as carbonless copy paper, caulking, floor finish and paint.

But they have also been linked to cancer, immune system difficulties and other health problems, and were outlawed by the U.S. government in 1979.

Monsanto produced PCBs from 1935 to 1977, and has said it stopped making them because they were not readily biodegradable.

The case is County of Los Angeles et al v Monsanto Co et al, U.S. District Court, Central District of California, No. 19-04694.

(Reporting by Jonathan Stempel in New York; Editing by Tom Brown)

U.S. trial tests claims Roundup weed killer caused cancer

By Jim Christie

(Reuters) – Bayer AG on Monday faced a second U.S. jury over allegations that its popular glyphosate-based weed killer Roundup causes cancer, six months after the company’s share price was rocked by a $289 million verdict in California state court.

The lawsuit by California resident Edwin Hardeman against the company began on Monday morning in federal rather than state court. The trial is also a test case for a larger litigation. More than 760 of the 9,300 Roundup cases nationwide are consolidated in the federal court in San Francisco that is hearing Hardeman’s case.

Bayer denies all allegations that Roundup or glyphosate cause cancer, specifically non-Hodgkin’s lymphoma, saying decades of independent studies have shown the world’s most widely used weed killer to be safe for human use and noting that regulators around the world have approved the product.

During the first phase in the trial, the nine-person jury is asked to weigh scientific evidence to determine whether Roundup caused Hardeman’s lymphoma.

Aimee Wagstaff, a lawyer for Hardeman, told a packed courtroom during her opening statement on Monday that chemicals in Roundup made the weed killer more toxic than glyphosate alone, causing the man’s cancer.

But U.S. District Judge Vince Chhabria, who presides over the federal litigation, repeatedly scolded her for “crossing the line” by referring to internal corporate communications the judge has said have no bearing on the science in the case.

“You completely disregarded the limitations,” Chhabria said.

In a January ruling, Chhabria called evidence by plaintiffs that the company allegedly attempted to influence regulators and manipulate public opinion “a distraction” from the scientific question of whether glyphosate causes cancer.

If the jury determines Roundup caused Hardeman’s cancer, the judge said such evidence could be presented in a second trial phase.

Plaintiffs criticized Chhabria’s order dividing the trial and restricting evidence as “unfair,” saying their scientific evidence allegedly showing glyphosate causes cancer is inextricably linked to Monsanto’s alleged wrongful conduct.

Evidence of corporate misconduct was seen as playing a key role in the finding by a California state court jury in August that Roundup caused another man’s non-Hodgkin’s lymphoma and that Bayer’s Monsanto unit failed to warn consumers about the weed killer’s cancer risks. That jury’s $289 million damages award was later reduced to $78 million.

Bayer’s share price dropped 10 percent following the verdict and has remained volatile.

Brian Stekloff, a lawyer for Bayer, in his opening statement attacked the idea of a link between Roundup and cancer. He noted U.S. rates of non-Hodgkin’s lymphoma have remained steady over time, even when Roundup use began to soar in the 1990s.

Hardeman began using the Roundup brand herbicide with glyphosate in the 1980s to control poison oak and weeds on his property and sprayed “large volumes” of the chemical for many years on a regular basis, according to court documents. He was diagnosed with non-Hodgkin’s lymphoma at the age of 66 in February 2015 and filed his lawsuit a year later. Hardeman is currently in remission.

But Stekloff on Monday said Hardeman’s age and his history of chronic hepatitis C were known risk factors for developing lymphoma. The lawyer also said the majority of non-Hodgkin’s lymphoma incidents are idiopathic, or have no known cause.

(Reporting by Jim Christie in San Francisco, Writing by Tina Bellon; editing by Anthony Lin, Lisa Shumamker and Tom Brown)

Robots fight weeds in challenge to agrochemical giants

The prototype of an autonomous weeding machine by Swiss start-up ecoRobotix is pictured during tests on a sugar beet field near Bavois, Switzerland May 18, 2018. REUTERS/Denis Balibouse

By Ludwig Burger and Tom Polansek

YVERDON-LES-BAINS, Switzerland/CHICAGO (Reuters) – In a field of sugar beet in Switzerland, a solar-powered robot that looks like a table on wheels scans the rows of crops with its camera, identifies weeds and zaps them with jets of blue liquid from its mechanical tentacles.

Undergoing final tests before the liquid is replaced with weedkiller, the Swiss robot is one of new breed of AI weeders that investors say could disrupt the $100 billion pesticides and seeds industry by reducing the need for universal herbicides and the genetically modified (GM) crops that tolerate them.

Dominated by companies such as Bayer, DowDuPont, BASF and Syngenta, the industry is bracing for the impact of digital agricultural technology and some firms are already adapting their business models.

The stakes are high. Herbicide sales are worth $26 billion a year and account for 46 percent of pesticides revenue overall while 90 percent of GM seeds have some herbicide tolerance built in, according to market researcher Phillips McDougall.

“Some of the profit pools that are now in the hands of the big agrochemical companies will shift, partly to the farmer and partly to the equipment manufacturers,” said Cedric Lecamp, who runs the $1 billion Pictet-Nutrition fund that invests in companies along the food supply chain.

In response, producers such as Germany’s Bayer have sought partners for their own precision spraying systems while ChemChina’s Syngenta , for example, is looking to develop crop protection products suited to the new equipment.

While still in its infancy, the plant-by-plant approach heralds a marked shift from standard methods of crop production.

Now, non-selective weedkillers such as Monsanto’s Roundup are sprayed on vast tracts of land planted with tolerant GM seeds, driving one of the most lucrative business models in the industry.

‘SEE AND SPRAY’

But ecoRobotix , developer of the Swiss weeder, believes its design could reduce the amount of herbicide farmers use by 20 times. The company said it is close to signing a financing round with investors and is due to go on the market by early 2019.

Blue River, a Silicon Valley startup bought by U.S. tractor company Deere Co. for $305 million last year, has also developed a machine using on-board cameras to distinguish weeds from crops and only squirt herbicides where necessary.

Its “See and Spray” weed control machine, which has been tested in U.S. cotton fields, is towed by a tractor and the developers estimate it could cut herbicide use by 90 percent once crops have started growing.

German engineering company Robert Bosch  is also working on similar precision spraying kits as are other startups such as Denmark’s Agrointelli . ROBO Global , an advisory firm that runs a robotics and automation investment index tracked by funds worth a combined $4 billion, believes plant-by-plant precision spraying will only gain in importance.

“A lot of the technology is already available. It’s just a question of packaging it together at the right cost for the farmers,” said Richard Lightbound, Robo’s CEO for Europe, the Middle East and Africa.

“If you can reduce herbicides by the factor of 10 it becomes very compelling for the farmer in terms of productivity. It’s also eco friendly and that’s clearly going to be very popular, if not compulsory, at some stage,” he said.

‘PAUSE FOR THOUGHT’

While Blue River, based in Sunnyvale, California, is testing a product in cotton fields, it plans to branch into other major crops such as soy. It expects to make the product widely available to farmers in about four to five years, helped by Deere’s vast network of equipment dealers.

ROBO’s Lightbound and Pictet’s Lecamp said they were excited by the project and Jeneiv Shah, deputy manager of the 152 million pound ($212 million) Sarasin Food Agriculture Opportunities fund, said the technology would put Bayer and Syngenta’s crop businesses at risk while seed firms could be hit – albeit to a lesser extent.

“The fact that a tractor and row-crop oriented company such as John Deere did this means it won’t be long before corn or soybean farmers in the U.S. Midwest will start using precision spraying,” Shah said.

While the technology promises to save money, it could be a tough sell to some U.S. farmers as five years of bumper harvests have depressed prices for staples including corn and soybeans. U.S. farm incomes have dropped by more than half since 2013, reducing spending on equipment, seeds and fertilizer.

Still, the developments are giving investors in agrochemicals stocks pause for thought, according to Berenberg analyst Nick Anderson. And agrochemical giants are taking note.

Bayer, which will become the world’s biggest seeds and pesticides producer when its acquisition of GM crop pioneer Monsanto completes, teamed up with Bosch in September for a “smart spraying” research project.

The German partners plan to outpace rivals by using an on-board arsenal of up to six different herbicides and Bayer hopes the venture will prepare it for a new commercial model – rather than cannibalizing its current business.

“I would assume that within three years we would have a robust commercially feasible model,” Liam Condon, the head of Bayer’s crop science division said in February.

“I’m not concerned in terms of damping sales because we don’t define ourselves as a volume seller. We rather offer a prescription for a weed-free field, and we get paid based on the quality of the outcome,” he said.

Bayer agreed to sell its digital farming ventures, including the Bosch project, to German rival BASF as part of efforts to win antitrust approval to buy Monsanto. But BASF will grant Bayer an unspecified license to the digital assets and products.

BASF said the Bosch precision spraying collaboration was very interesting but it was too early to comment further as the transaction had not completed.

‘PART OF THE STORY’

Syngenta, which was an investor in Blue River before Deere took over, said the advantages of the new technology outweighed any potential threats to its business model.

“We will be part of the story, by making formulations and new molecules that are developed specifically for this technology,” said Renaud Deval, global head of weed control at Syngenta, which was bought by ChemChina last year.

While it has no plans to invest directly in engineering, Syngenta is looking into partnerships where it can contribute products and services, Deval said.

Still, Sarasin’s Shah said the big agrochemical firms would need to accelerate spending on getting their businesses ready for new digital agricultural technology.

“The established players need to invest a lot more than they currently are to be positioned better in 10 years’ time. The sense of urgency will increase as farmers start to adopt some of the more advanced kits that are coming out,” he said.

Michael Underhill, chief investment officer at Capital Innovations, also said the major players may be underestimating the potential impact on their pesticides businesses.

“Precision leads to efficiency, efficiency leads to decreased usage, decreased usage leads to decreased margins or margin compression, and that will lead to companies getting leaner and meaner,” said Underhill.

He said the GM seeds market would also take a hit if machine learning takes over the role genetic engineering has played so far in shielding crops from herbicides’ friendly fire.

“Instead of buying the Cadillac of seeds or the Tesla of seeds, they may be buying the Chevy version,” Underhill said.

NEW WEAPONS

The advent of precision weed killing also comes at a time blanket spraying of global blockbusters such as glyphosate is under fire from environmentalists and regulators alike.

More than 20 years of near-ubiquitous use of glyphosate, the active substance in Monsanto’s Roundup, has created resistant strains of weeds that are spreading across the U.S. farm belt.

Regulators have raised the bar for bringing blanket chemical agents to market and the fear of toxic risks has been heightened by the debate over the potential impact of glyphosate on health.

Michael Owen, associate chair at Iowa State University’s Department of Agronomy, reckons it would now cost agrochemical giants up to an almost prohibitive $400 million to develop a next-generation universal weedkiller.

Bayer’s Condon said in the current environment precision spraying could well be the final blow to further attempts to develop new broad-spectrum or non-selective herbicides.

“Everything that comes tends to be selective in nature. There won’t be a new glyphosate. That was probably a once-in-a-lifetime product,” said Condon.

For now, the industry is reviving and reformulating older, broad-spectrum agents known as dicamba and 2,4-D to finish off glyphosate-resistant weeds – and it is selling new GM crops tolerant to those herbicides too.

Precision spraying could mean established herbicides whose effect has worn off on some weeds could be used successfully in more potent, targeted doses, said Claude Juriens, head of business development at ecoRobotics in Yverdon-les Bains.

But experts say new products will still be needed for the new technology and some chemical firms are considering reviving experimental herbicides once deemed too costly or complex.

“Because we’re now giving the grower an order of magnitude reduction in the amount of herbicide they’re using, all of a sudden these more expensive, exotic herbicides are now in play again,” said Willy Pell, Blue River director of new technology.

“They’ve actually devoted resources to looking through their backlog, kind of cutting room floor, and rethinking these different materials with our machine in mind,” he said.

(Additional reporting by Rod Nickel in Toronto and Simon Jessop in London; editing by David Clarke)

Bayer offers to buy Monsanto to become world’s biggest supplier

Monsanto is displayed on a screen where the stock is traded on the floor of the NYSE

By Greg Roumeliotis and Mike Stone

NEW YORK/FRANKFURT (Reuters) – German drugs and chemicals group Bayer has made an unsolicited takeover proposal to U.S. seeds company Monsanto, aiming to create the world’s biggest agricultural supplier and take advantage of converging pesticides and seeds markets.

Monsanto disclosed the approach on Wednesday before Bayer confirmed its move, though neither released proposed terms.

The $42 billion market capitalization of Monsanto means that the deal would be likely to eclipse ChemChina’s planned acquisition of Swiss agrichemicals company Syngenta — a target Monsanto itself pursued last year — and could face U.S. antitrust hurdles.

A Monsanto statement said that its board was reviewing the proposal, which is subject to due diligence, regulatory approvals and other conditions. There is no assurance that any transaction will take place, it added. Bayer shares dropped more than 8 percent to a 2-1/2 year low of 88.39 euros in early Thursday trading, with some investors worried by the potential cost of a deal.

Monsanto shares were seen 7.6 percent higher at $104.50 in pre-market trades.

UBS Global Asset Management, which Reuters data shows is among Bayer’s 30 biggest investors, said it was “deeply concerned” about the burden on Bayer’s finances from a takeover, saying it would prefer the companies to agree a joint venture or a nil-premium merger.

Deutsche Bank analysts said a deal could shift Bayer’s center of gravity to agriculture, accounting for about 55 percent of core earnings, up from roughly 28 percent last year excluding the Covestro chemicals business Bayer plans to sell.

That would have a negative impact on sentiment among Bayer’s healthcare-focused investor base, the bank said.

PRICE ESTIMATES

Bayer, which has a market value of $90 billion, said the merger would create “a leading integrated agriculture business”, referring to Bayer’s push to seek more synergies from combining the development and sale of seeds and crop protection chemicals.

Most of the major agrichemical companies are aiming to genetically engineer more robust plants and custom-build chemicals to go with them, selling them together to farmers who are struggling to contend with low commodity prices.

While no takeover price was mentioned by either company, Bernstein Research analyst Jeremy Redenius estimated that it would be 41.9 billion euros ($47 billion), plus 6.7 billion euros in assumed debt. He said that Bayer might need a 27 billion euro share issue to help to fund the purchase.

Citi analysts have said that Bayer would probably need to pay 14-16 times Monsanto’s core earnings, implying a takeover price including debt of 57 billion euros to 65 billion euros.

A sale of Bayer’s stake in foam chemicals maker Covestro could raise about 4 billion euros, while its animal health business, which Bayer has said it might put on the block, could fetch up to 7 billion euros.

The proposal comes as ChemChina’s deal for Syngenta faces regulatory review in the United States over concerns about the security of U.S. food supply.

Any deal between Bayer and Monsanto, which would be Bayer’s largest by far and dwarf the 17 billion euro takeover of drugmaker Schering in 2006, could raise U.S. antitrust concerns because of an overlap in seeds business, particularly in soybeans, cotton and canola, antitrust experts have said.

The proposal comes less than three weeks after Werner Baumann took over as Bayer chief executive, a sign of the power base he built in his previous role as strategy chief.

Bayer, the inventor of aspirin and maker of Yasmin birth control pills, is far more diversified than Syngenta or Monsanto, with products including cancer drugs, flea and tick collars for pets and Coppertone sunscreen. Some analysts have said a deal with Monsanto could lead to a break up of the group.

Bayer’s crop science division has businesses in seeds, crop protection and non-agricultural pest control, potentially complementing Monsanto’s seeds assets.

BAYER, BASF AMBITIONS

Both Bayer and German rival BASF SE have been looking to build scale in agrichemicals. Monsanto said after its failure to land Syngenta that it didn’t need to do a deal, but it has also been involved in discussions.

Monsanto approached Bayer this year to express interest in the latter’s crop science unit, in the form of an acquisition or joint venture, sources told Reuters in March.

Both Bayer and BASF had been exploring tie-ups with Monsanto for months but valuation concerns have made a deal elusive, sources have said.

Bayer is ranked No. 2 in crop chemicals, with an 18 percent market share, just behind Syngenta on 19 percent, industry data shows.

Monsanto is the leader in seeds, with a 26 percent market share, followed by DuPont with 21 percent. DuPont agreed last year to merge with Dow Chemical. Any Bayer-Monsanto deal would further reduce the number of major players in seeds and pesticides to four from six.

Morgan Stanley and Ducera Partners are financial advisers to Monsanto, the company said in its statement, while Wachtell, Lipton, Rosen &amp; Katz is legal adviser.

($1 = 0.8920 euros)

(1 euro = $1.1205)

(Additional reporting by Ludwig Burger in Frankfurt and Victoria Bryan in Berlin; Editing by Kenneth Maxwell, Mark Potter and David Goodman)