Bayer AG faces two fresh setbacks, causing the stock to plummet, after stopping the main study of its top experimental medicine and losing a key US trial against its weed killer Roundup.
The shares fell as much as 11% in early Frankfurt trading to the lowest level in more than a decade. The plunge wiped out about 4.6 billion euros ($5 billion) in market value.
The German company said Sunday it had ended a late-stage test for the anti-thrombotic drug asundexian — a therapy billed as a potential blockbuster — due to a lack of efficacy.
A day earlier, Bayer’s Monsanto unit was ordered by a Missouri jury to pay more than $1.5 billion to three former Roundup users who blamed their cancers on the controversial product in one of its largest trial losses over the herbicide.
The two events raise the stakes for Bill Anderson, who took over as chief executive in June and said this month he’s weighing a breakup of the pharma and agriculture conglomerate.
Anderson joined as Bayer confronts a thicket of challenges after the $63 billion takeover of Monsanto turned sour and its pharma unit faces patent expirations for some key treatments.
The experimental drug that failed, asundexian, was intended to help drive growth after current best-selling medicines Xarelto and Eylea lose their patent protections in coming years.
Drug Disappoints
An independent panel found the drug underperformed the standard of care when it came to preventing stroke and systemic embolism in patients with a form of abnormal heart rhythm called atrial fibrillation.
The indication represented about €4 billion of the estimated €5.5 billion in peak sales for the drug, Thibault Boutherin and colleagues at Morgan Stanley said in a note Monday.
“Asundexian was a key pipeline asset for Bayer’s pharma division,” the analysts wrote, calling the announcement “a meaningful negative.”
On the agriculture front, meantime, Monsanto has been hit with a recent spate of jury verdicts finding Roundup contains carcinogens. The more than $1.5 billion verdict is one of the largest damage awards handed down against a US corporate defendant this year.
Bayer said it will appeal the verdicts and insists the product is safe. Two years ago, the company set aside as much as $16 billion to resolve more than 100,000 cases over Roundup’s health impact.
The conglomerate now faces a second wave of lawsuits. The legal risks could complicate Anderson’s efforts to spin off the agriculture division, if he opts for that path, Sebastian Bray, an analyst with Berenberg, said in an email.
Bayer is currently in another Roundup trial before a state court jury in Philadelphia involving a man who blames the weed killer for his cancer. The jury is still hearing evidence and closing arguments in the case aren’t expected until later this month or in early December, according to lawyers involved in the case.
Another case is scheduled to start in California in December, with at least three other cases slated to begin in Philadelphia in coming months.
--With assistance from Jef Feeley and James Cone.
(Updates with shares from first paragraph)
