Bayer, more famously known as the company that acquired Monsanto in 2018, has devotedly shared in the latter’s disgrace. Monsanto was already reeling under public protests and legal battles due to its harmful synthetic chemicals.

Originally the acquisition was meant to create the largest agrochemical and biotechnology seed firm in the world. Speculations have circulated that this merger was nothing but an attempt to blot out Monsanto’s blemished past. 

But as they say that one’s misdeeds do catch up eventually, Bayer finds itself in a precarious situation with its treasury running dry. The predominant factor behind the company’s current condition is various pending lawsuit settlements.

In this article, we will discuss these lawsuits, Bayer’s sad estate, and its plan to recover.

Tackling the Glyphosate Disaster

Glyphosate is a systemic herbicide that is also non-selective. Its chemical composition was first discovered in 1950 by a chemist from Sweden. However, Dr. John Franz (a Monsanto chemist) understood its herbicidal activity in 1970.

By 1974, Monsanto’s flagship product, Roundup weed killer, was commercially available. Being non-selective meant that Roundup would not only kill the harmful weeds but also the good kinds. Plants do benefit from certain weeds that break up the soil and bring up nutrients that are hard to reach otherwise.

Besides the possibility of harvesting nutrient-deficient crops, glyphosate was criticized for health concerns. The herbicide exposed individuals to the threat of developing cancer, especially non-Hodgkin’s lymphoma. By 1996, the first Roundup lawsuit was filed against Monsanto for deceptive marketing practices.

It was alleged that the herbicide manufacturer was aware of the risks involved but continued to market its product as safe and effective. However, it was only in 2018 that the first-ever trial was held for this litigation. Monsanto settled the case with $289 million.

As of today, Bayer has paid $11 billion to close at least 100,000 Roundup lawsuits. It has even agreed to stop the herbicide’s production for residential use (keeping it available only for commercial farmers).

Facing Hefty Legal Bills for PCB Leaks

PCB or Polychlorinated Biphenyls are a group of complex man-made chemicals first manufactured by Monsanto back in 1929. Being highly stable mixtures, PCBs were resistant to variations in pressure and temperature.

As a result, they were used widely in the manufacture of electrical equipment like transformers and capacitors. Moreover, these chemicals became the main ingredient in the production of heat transfer fluids, hydraulic fluids, plasticizers, and lubricants.

Just like any other man-made chemical, PCBs were later discovered to be extremely toxic for humans, wildlife, and the environment. According to the Agency for Toxic Substances and Disease Registry, PCB exposure can lead to respiratory issues, hepatic damage, and dermal lesions.

Even in animals, these chemicals produce a range of toxic responses like genotoxicity, fatty liver, carcinogenesis, porphyria, and hepatomegaly. What’s even worse is that PCBs do not easily degrade in the environment. 

As a result, they continue to plague the world despite being banned in 1979. After all, a whopping 1.5 billion pounds were produced in the decades when they were still in use.

Today, the situation has entered the Federal courtroom. A PCB lawsuit is being filed primarily by schools because of chemical leaks and injuries related to chronic exposure. While there are multiple defendants involved, it is still Monsanto/Bayer leading the pack.

As per TorHoerman Law, an investigation is ongoing with a special focus on schools with fluorescent lighting containing PCBs. Recently, Bayer was ordered by the court to settle seven such cases with $857 million in payouts.

Previously, the company had already paid $650 million to a class of 2,500 municipal entities. As time passes, there may be more payouts in the picture that further drain the company’s resources. 

Massive Share-Price Slump and the Way Forward

Given the huge amounts of money that Bayer has lost settling one lawsuit after another, it is no surprise that its shares have fallen by 21% of their value. The company has also reported a total loss of $5 billion in the third quarter due to declining sales and earnings.

As a result, it is looking towards a future of business spin-off to maintain grounds. However, Bayer’s CEO, Bill Anderson, believes that a mere business breakup would not help fix the ills of Monsanto. He is more inclined towards a tough restructuring of Bayer’s drug pipeline that could help the company recover.

In any case, it is unlikely that a universal cure for Bayer’s disastrous acquisition will be available anytime soon. Even from a personal front, the company has failed to secure public trust in its biotechnology seeds and agrochemical products.

In the final analysis, it looks like Bayer is just another pharmaceutical and ‘consumer health’ product company that keeps profits over people. As for the company’s recovery, time will reveal if its restructuring strategy bears good fruit.