Bayer inks largest settlement in pharma history with $10B Roundup deal

Bayer
A settlement could spell a path forward for Bayer CEO Warner Baumann. (Bayer

Bayer volunteered for quite a headache with its 2018 pickup of Monsanto and weedkiller Roundup, what with lawsuits piling up and investors chomping at the bit. Now, it's looking to relieve the pain of that multibillion-dollar legal overhang with an enormous deal to escape the Roundup litigation. 

Bayer will dole out between $10.1 billion and $10.9 billion—the single largest settlement in pharma history—to put an end to thousands of lawsuits tied to its acquisition of Monsanto and glyphosate-based Roundup. 

As part of its agreement, Bayer will pay between $8.8 billion and $9.1 billion to settle roughly 125,000 Roundup lawsuits combined in a California multi-district litigation and multiple state bellwether trials, Bayer said. The deal will settle roughly 75% of all Roundup suits and includes an allowance to pay out claims that have not been resolved.

Bayer will also set aside $1.25 billion to cover any future Roundup claims, which will be handled as part of a class negotiation. Bayer will not admit any wrongdoing as part of its settlement deal. 

SPECIAL REPORT: The top 20 pharma companies by 2019 revenueBayer

 

For Bayer, finally putting away its Roundup overhang could settle investor angst—and end the repeated calls for CEO Warner Baumann's job. The Monsanto acquisition was blasted by shareholders who saw the buyout as pulling away from Bayer's lucrative pharma R&D division, a sentiment that sent the company's stocks plummeting soon after. 

"First and foremost, the Roundup settlement is the right action at the right time for Bayer to bring a long period of uncertainty to an end,” Baumann said in a statement. “It resolves most current claims and puts in place a clear mechanism to manage risks of potential future litigation."

The massive deal doesn't come as a huge surprise after Bloomberg reported a rough sketch of the settlement and the $10 billion total back in May. 

RELATED: No more legal headache for Bayer as it nears $10B Roundup settlement: report

In April, Baumann won an overwhelming vote of confidence from Bayer's shareholders at the German drugmaker's annual meeting following multiple rounds of calls for a shakeup at the top. 

Suggested Articles

Bayer has withdrawn part of a proposed Roundup settlement after a judge questioned how it's handling potential future claims.

Consensus pegs cabotegravir peak sales at £750 million ($945 million), indicating it can grab about one-third of the current PrEP market.

The CEOs for COVID-19 vaccine partners Pfizer and BioNTech are sounding confident in their program as they gear up for phase 3.