German pharmaceutical maker Bayer reported a sharp rise in earnings in 2019, thanks to its acquisition of US rival Monsanto two years ago. However, the company’s legal woes relating to the US firm’s Roundup weedkiller are deepening.

Earnings before interest, taxes, depreciation, amortisation and special items rose by 28.3 per cent to a record €11.503bn last year, while adjusted group sales rose 3.5 per cent to €43.55bn, Bayer said.

Bayer bought US agribusiness Monsanto in 2018 for $63bn and, with it, took over Monsanto’s legal battle over its Roundup herbicide, which has been embroiled in a slew of lawsuits that claim the glysophate-based weedkiller causes cancer.

The company said in its annual results it is now facing lawsuits from 48,600 plaintiffs, up from 42,700 in October. It added that it had been served with 11 Canadian lawsuits also relating to Roundup in early February. Its legal battle could force it to sell assets or raise additional debt to cover the cost of any fines or settlements.

“We may incur considerable financial disadvantages from the pending lawsuits and/or potential future cases if, for example, we are ordered to pay compensatory and possibly punitive damages or if we assume payment obligations under out-of-court settlements,” the company said.

“We could be compelled to cover any such increased financial requirements by issuing additional external debt, increasing our equity capital or divesting assets – possibly on unfavourable terms – or through combinations of these measures.”

Earnings per share rose to €6.40 for the whole of 2019, from €5.60 the previous year, but investors took a dim view of the company’s results. Bayer shares were last down nearly 3 per cent in Frankfurt at €67.89, near three-month lows.

Bayer said it still expects EBITDA before special items to rise to €12.3-12.6bn on a currency-adjusted basis this year, but added this does not factor in the coronavirus that has killed nearly 3,000 people and infected tens of thousands around the world.

Bayer’s US legal headache has grown to the point that longstanding chairman, Werner Wenning, announced on Wednesday he was stepping down after 50 years. He will be replaced by Norbert Winkeljohann.

The US government concluded in January that tests had shown that the danger from weedkillers made from glysophate probably lay with added ingredients in the products, not the glysophate itself. The tests showed some formulations sold to the public were found to be genotoxic, which means they are damaging to human DNA.

Bayer said in its results it would continue to appeal against the findings of three US trial juries that found glysophate to be carcinogenic.

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