In a shocking turn of events, a U.S. jury has found that a popular glyphosate-based weedkiller was a “substantial factor” in causing a California man’s cancer.
Roundup, the product under scrutiny in the trial, has put manufacturer Bayer AG on the defensive – a company that now looks foolish after staunchly rejecting that the weed-fighting chemical blend was a carcinogen.
The jury in San Francisco thought otherwise, though, and once presented with what they deemed was overwhelming evidence, voted unanimously in support of the accusations.
California resident Edwin Hardeman, who was recently diagnosed with non-Hodgkin’s lymphoma, sued the Bayer pharmaceutical group on claims that Roundup had been a major contributor to his cancer – sending shockwaves through the highly regulated home-chemical industry.
And now that a jury has confirmed Bayer’s worst fears – resulting in a 10% daily drop in share prices – the next court date (set for Wednesday) could skewer company investors even further. In the proceedings, Hardeman’s lawyers are expected to present evidence of Bayer’s ongoing unethical business practices – including the tampering of scientists, regulators, and the public, all to get what Hardeman claims are unsafe products in the hands of consumers.
German-based Bayer, a company’s that most famous for its brand of aspirin, acquired Roundup when it purchased Monsanto for $66 billion last year. Since the jury’s decision was made public, the company has attempted to save face, deflecting blame:
“We are confident the evidence in phase two will show that Monsanto’s conduct has been appropriate, and the company should not be liable for Mr. Hardeman’s cancer,” Bayer representatives said, adding that they continue “to believe firmly that science confirms that glyphosate-based herbicides do not cause cancer”.
And though today’s bombshell court case may have torpedoed Bayer shares, it’s not the first time that something like this has happened. In fact, back in August, another California resident was awarded $289 million after a jury found that Roundup caused his cancer. As expected, Bayer’s stock plunged after the news broke.
Now that the company has two damning trials under its belt, some serious decisions need to be made – both from investors and internal leadership. And even though this could hasten the decline of Bayer, whose shares dropped 43% in 2018, the pharma group still might be able to come out on the other side of this somewhat unscathed.
After all, this is the same company that accidentally infected thousands of Americans with HIV back in the early 80s via supplemental blood and plasma products. Once they figured out what was happening, Bayer decided it was “too costly” to simply shelf the product, and instead began selling it in parts of Asia and Latin America – knowingly infecting more people.
By 1997, after more than a decade of negotiations with the affected parties, Bayer ended up only paying out $660 million to the surviving victims (in the United States) – averaging roughly $100,000 per infected person. In the grand scheme of things, this was a small slap on the wrist considering their wanton negligence.
But don’t worry – it gets worse.
During WW2, Bayer’s parent company IG Farben purchased 150 female concentration camp prisoners from Auschwitz to be used as slave labor, for the price of 170 Reichsmark per person (roughly $68 dollars in the early 1940s).
After receiving the inmates, a Bayer employee ordered another batch, as reflected in his grisly correspondence with Auschwitz commandant Rudolf Höss:
“The transport of 150 women arrived in good condition. However, we were unable to obtain conclusive results because they died during the experiments. We would kindly request that you send us another group of women to the same number and at the same price.”
After the war, the Allied Control Council seized IG Farben for “knowingly and prominently building up and maintaining German war potential,” and split the corporation into its six constituent companies – giving birth to Farbenfabriken Bayer AG. The company shortened its name, and has since become the Bayer we all know and love (but should probably despise).
In the end, Bayer got off scot-free yet again, issuing an apology in 1995 (a few years too late, fellas) to famed author and holocaust survivor Elie Wiesel, as if saying sorry to one man could make up for years of aiding in the genocide of the Jewish people.
At this point, it looks like Bayer AG is more or less bulletproof. Throughout history they’ve never really had to pay the piper for their willful maliciousness, and if Roundup really did cause Edwin Hardeman’s cancer, then one could only hope that Bayer’s finally taken to task for it. It almost happened in last year’s Roundup case, as a $289 million payout is nothing to scoff at, and if that trend continues, things could get much, much more expensive for each subsequent guilty verdict.
And yes, even though the company creates products that have helped millions of people, it’s not enough to offset their truly dark past. What we’re seeing out of California today could simply be another chapter in their sordid history – something that should scare off investors, regardless of fundamentals or technical indicators.
