Bayer © Image author: CEM GUENES
Bayer © Image author: CEM GUENES

German chemical giant Bayer recorded its largest drop in market value for more than a decade on 20 November with a loss of approximately US$8.3bn due to legal and drug development setbacks, according to a Fortune report.

The company’s shares dropped by nearly 19% on the Frankfurt Stock Exchange, reaching their lowest point since 2009, Gutzy Asia wrote on 22 November. This decline marked a 30% decrease in share value over the course of this year.

Bayer lost a key US trial when it was ordered to pay more than US$1.5bn on 17 November to three plaintiffs who claimed that their non-Hodgkin lymphoma cancer was caused by using the company’s glyphosate-based Roundup weedkiller.

The company had set aside as much as US$16bn two years ago to resolve more than 100,000 Roundup cases but now faced a second wave of lawsuits, the 20 November Fortune report said.

Bayer also announced on 19 November that late-stage testing of its asundexian drug, intended for heart disease treatment, would be halted due to its apparent lack of effectiveness.

Initially projected in January to potentially yield sales exceeding US$5bn, asundexian had been expected to drive growth once best-selling medicines Xarelto and Eylea lost their patent protections in coming years, Fortune said.

Bayer’s fall in value puts further pressure on Bill Anderson, who took over as chief executive in June, who is considering separating the consumer health or crop science divisions as part of a range of options to re-structure the company.

The company was looking into separating either the non-prescription medicines business or the agriculture business from the rest of the group - which includes pharmaceuticals - but not at the same time, Bayer said in a statement reported by Reuters on 8 November.

A staggered split into three companies was also an option, as was keeping all three divisions, Anderson said.

The German maker of medicines, seeds and crop chemicals also announced plans to reduce management layers to accelerate decision-making, resulting in a “significant reduction” in its workforce, Reuters wrote.

Bayer said that it expected a “soft growth outlook and continued challenges” to profitability next year. It also expressed confidence in its 2023 financial guidance but said a strong fourth quarter was needed.

The company’s agriculture, prescription drugs and consumer health care units accounted for about 50%, 38% and 12% of 2022 group sales, respectively, the report said.