German pharmaceuticals firm Bayer has decided to scrap plans to widely sell a new US crop protection chemical in 2020 following safety concerns.
The NemaStrike product from US agribusiness Monsanto – which Bayer acquired in June 2018 for US$63bn – would not be offered after a limited number of people suffered skin irritation after handling it or seeds treated with the product, Reuters wrote on 30 July.
“After a careful assessment of the applicator and grower experience in 2019, Bayer has made the decision that NemaStrike Technology will not be offered broadly in 2020 for corn, cotton or soyabeans,” Bayer said.
NemaStrike is applied to crop seeds to defend plants from attacks by worms called nematodes, which Monsanto said could reduce yields by more than 10%.
The decision has come as Bayer faces lawsuits from 18,400 plaintiffs claiming its glyphosate-based weedkiller Roundup allegedly causes non-Hodgkin’s lymphoma in users, according to Rappler.com. This figure has shot up from 13,400 cases in April.
Bayer’s most recent pay-out went to a California couple, who were awarded US$87M (slashed from US$2bn).
On 30 July, the group reported a 49.1% year-on-year fall in net profits to US$450M in its second quarter 2019 earnings.
In addition, Bayer said it had been affected by flooded farms in the USA and global trade disputes, which had caused its 2019 profit goal to become a stretch.
Bayer said it was still aiming for an increase in 2019 earnings before interest, taxes, depreciation and amortisation (EBITDA) before special items to about €12.2bn (US$13.6bn), excluding the effect of currency swings and the planned sale of assets such as its animal health unit, Reuters reported.
“However, this outlook is becoming increasingly ambitious in view of the challenging environment for the crop science business,” Bayer added.