A U.S. Supreme Court ruling in favor of the Leverkusen-based group could provide a definitive breakthrough in the years-long wave of litigation surrounding the alleged carcinogenic effects of the weedkiller. The group argues that the U.S. Environmental Protection Agency (EPA) has repeatedly classified glyphosate as non-carcinogenic and approved product labels without cancer warnings. Nevertheless, Bayer has been repeatedly ordered by lay juries in various U.S. states to pay billions in damages. The company maintains that federal agency mandates must therefore preempt state law.
If the court adopts this reasoning, it would undermine the legal basis for many pending lawsuits. Otherwise, Anderson warned of a patchwork of contradictory regulations driven by individual states and jury trials. 'Why should one bring new products to market that cost billions and require decades of research if, despite a rigorous approval process, one is exposed to the risk of billions in legal costs?'
A Supreme Court ruling is expected by the end of June. Even in the event of a defeat, Anderson expressed confidence in being able to 'significantly contain' the litigation this year. For a 'worst-case scenario', the group is keeping further options open, including 'structural options' affecting the corporate setup. However, there are currently no plans for such a step, Anderson said, citing the ongoing class-action settlement and hopes for a favorable court ruling.
In parallel, Bayer is attempting to secure regulatory clarity in the U.S. through political channels. While a corresponding law was passed in the state of Kentucky, Bayer suffered a setback during federal discussions on the 'Farm Bill' legislative package. Conversely, progress is being made on the class-action settlement of up to 7.25 billion dollars with plaintiff law firms, which received preliminary approval in early March. The deadline for plaintiffs to opt out runs until June 4, with a hearing for final approval scheduled for July.
AGRICULTURAL BUSINESS PROVIDES UNEXPECTEDLY STRONG TAILWINDS
The ongoing cost of legal legacy issues was reflected in the free cash flow, which stood at minus 2.3 billion euros in the first quarter, primarily due to payouts of approximately two billion euros for previously settled cases involving PCB and glyphosate. Operationally, however, the business performed unexpectedly well, bolstered by one-off effects in the agricultural division. On the stock market, Bayer was the top gainer on the Dax, rising six percent.
Adjusted operating profit (EBITDA) rose by nine percent to 4.45 billion euros in the first quarter, significantly exceeding analyst expectations of 3.93 billion euros. While revenue fell by more than two percent to 13.41 billion euros, Bayer grew by over four percent on a currency-adjusted basis. The agricultural division benefited primarily from the settlement of a licensing dispute with U.S. rival Corteva, which contributed nearly half a billion euros to revenue. Additionally, prices for the weedkiller Dicamba recovered in the U.S., driving a nearly 18 percent increase in divisional earnings.
In the pharmaceutical business, however, Bayer felt the impact of patent expiries for blockbusters such as the anticoagulant Xarelto and the eye drug Eylea. In contrast, newer medications Nubeqa and Kerendia recorded strong growth. Nevertheless, the pharmaceutical division's operating result fell by 7.5 percent, partly due to higher marketing costs. The group reaffirmed its currency-adjusted outlook for the current year. Due to exchange rate fluctuations, Bayer slightly raised its unadjusted target ranges. For 2026, management now expects revenue of 44.5 to 46.5 billion euros (previously 44 to 46) and earnings before special items of 9.4 to 9.9 billion euros (previously 9.1 to 9.6).
(Report by Patricia Weiss, edited by Olaf Brenner. For inquiries, please contact our editorial office at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
