Monsanto woes stack up as Bayer stock keeps falling

David Meyer
Forbes
Thu, 16 Aug 2018 13:05 UTC

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Bayer stock continues to slide in the wake of last week's bombshell verdict on the carcinogenic nature of Monsanto's Roundup weedkiller.

Bayer bought Monsanto earlier this year for $63 billion. Roundup's active ingredient is a herbicide called glyphosate, which a jury last week decided was responsible for the cancer of former groundskeeper Dewayne Johnson-a verdict that quickly lopped 10% off Bayer's share price.

Glyphosate's responsibility for causing cancer is a deeply contentious issue. The World Health Organization thinks the substance is dangerous. However, the European Union decided in 2015 that it is not carcinogenic, the Environmental Protection Agency said last year that it probably doesn't cause cancer, and Bayer continues to argue that its newly acquired product is safe-it's appealing the Johnson ruling.

But on Wednesday, the California Supreme Court turned down Bayer's attempt to keep Roundup's name off a list of known carcinogenic chemicals.

Bayer's share price fell 6.1% on Thursday, following the Californian decision. So far, it has lost more than 18% of its value since the Johnson verdict, and is now lower than it has been for more than five years.

The negative sentiment can also be traced to class action lawsuits that the company is facing in the U.S. over its Dicamba herbicide. According to Bloomberg, Arkansas and South Dakota farmers who are suing Bayer/Monsanto say Dicamba harmed crops adjacent to those on which it was sprayed-it's only supposed to be applied to plants that are engineered for resistance to Dicamba.

Comment: Dicamba devastation: Farmers in 10 states sue Monsanto

Meanwhile, according to Germany's Wirtschaftswoche magazine, glyphosate could also face a ban in Brazil. And environmentalists said Wednesday that they found unhealthy levels of glyphosate in popular breakfast cereals such as Cheerios.

Comment: Dangerous grains: Monsanto's toxic glyphosate found in 43 out of 45popular children's cereals

"The perception is that a huge wave of lawsuits and penalty payments are rolling toward Bayer," Baader Bank analyst Markus Mayer told Bloomberg.

Comment: Monsanto Papers: Leaked docs reveal scientific mischief and regulatory collusion

"This is a look behind the curtain," said Wisner. "These show that Monsanto has deliberately been stopping studies that look bad for them, ghostwriting literature and engaging in a whole host of corporate malfeasance. They (Monsanto) have been telling everybody that these products are safe because regulators have said they are safe, but it turns out that Monsanto has been in bed with U.S. regulators while misleading European regulators."

Several of the documents discuss a lack of robust testing of formulated Roundup products. In one email, Monsanto scientist Donna Farmer writes "you cannot say that Roundup is not a carcinogen ... we have not done the necessary testing on the formulation to make that statement. The testing on the formulations are not anywhere near the level of the active ingredient."