Frankfurt am Main, Germany—German pharmaceuticals and chemicals giant Bayer on Tuesday posted another huge loss in its third quarter as it struggles to manage legal issues surrounding its glyphosate weed killer linked by plaintiffs to cancer cases.
The company made a net loss of 2.7 billion euros ($3.2 billion), compared with a profit of 1.05 billion euros in the same quarter last year and well down on analyst estimates for 798 million euros in profit, according to the FactSet financial information service.
However, the result improves on the 9.5 billion euro loss Bayer posted in the second quarter after it settled most lawsuits against its Roundup glyphosate weedkiller produced by Monsanto, the US agrochemical company it controversially acquired for 63 billion euros in 2018.
Since then, however, a California district judge has expressed major reservations about the settlement’s validity, forcing Bayer to back down on part of the agreement involving future cases.
Bayer said there were around 125,000 claims involving Roundup in June, but it will now “take more time” to address legal issues, and it had taken provisions in the third quarter of $2.0 billion (1.7 billion euros), up from $1.25 billion previously.
“The company is continuing to work on a joint proposal to address potential future Roundup claims together with plaintiffs’ counsel and is working in good faith to address the issues raised by the court,” Bayer said.
Its agrochemical business was also impacted by the depreciation of the Brazilian real, which is “weighing heavily” on trading in the world’s second-largest agricultural market.
However, Bayer confirmed its outlook for the full year “thanks to stringent cost management and the acceleration of our structural measures,” chief executive Werner Baumann said in a statement.
In October, Bayer said it would accelerate a cost-cutting program that may lead it to slash jobs as it also tries to mitigate the impact of COVID-19.
The company expects to save 1.5 billion euros by 2024, on top of the 2.6 billion euros of annual savings it expects to make from 2022, Bayer said.
That has not stopped Bayer’s share price tumbling. It is now down 43 percent in the year to date.
Its pharmaceuticals division recovered in the quarter, Bayer said, helped by its blockbuster blood thinner Xarelto, although the drug’s patent expiry in 2024 poses a challenge for future earnings prospects.
Bayer said last week it would buy US-based biotech firm AskBio for as much as $4.0 billion as it aims to get a foothold in the rapidly growing gene-therapy market.