Lawsuits to blame for Q2 loss, says Bayer

German pharmaceuticals and life sciences titan sees $10.9bn settlement of weedkiller cancer claims in US blow a big hole in the balance sheet

German drugs and pesticides group Bayer fell to a €9.5bn ($11.2bn, £8.5bn) net loss in the second quarter, mainly reflecting charges to settle disputes inherited with its $63bn takeover of Monsanto. The charges came mainly from a $10.9bn settlement of US lawsuits claiming weedkiller Roundup caused cancer, compounding a net loss that is the worst for Bayer in at least 10 years, according to a spokesman.

Settlements on dicamba, another weedkiller, and on waste water contaminated with polychlorinated biphenyls (PCBs) were also included in the figures, as were reserves for a deal on injury claims from birth-control device Essure, which Bayer said could be imminent.

Funds set aside for Essure accounted for most of the litigation charges of €1.25bn at the pharmaceuticals unit for the quarter. As of July 24, 32,000 US users of Essure had brought lawsuits against Bayer, slightly less than in February, Bayer said. Overall special items would reach about €14bn for the full year, the company also warned.

Bayer said core earnings or EBITDA, adjusted for special items, would reach €12.1bn this year, down from a target of between 12.3bn and 12.6bn issued in February. It said its pharmaceuticals and consumer health businesses would go back to normal overall, with hopes that the Covid-19 pandemic would encourage patients to see doctors.

Shares in Bayer were down 2.9 per cent at €56.75 in early-morning trading.


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