:max_bytes(150000):strip_icc()/GettyImages-2206406924-0beb558aaa104bb1b9f43da1afcabb11.jpg "Here’s Why the Maker of Roundup Weed Killer’s Stock Is Surging Today")
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Key Takeaways
- The U.S. Solicitor General on Monday supported Bayer’s efforts to get its case heard by the Supreme Court over whether it is liable for failing to abide by state-level laws concerning cancer risk warnings.
- The company argues that federal regulators have determined the chemical in question isn’t likely to be a carcinogen, meaning Bayer doesn’t need to include a cancer risk warning on the label.
Shares of pharmaceutical conglomerate Bayer (BAYRY) are surging 12% on their home exchange in Germany after the U.S. Solicitor General supported its efforts to have the Supreme Court review prior rulings on whether Roundup weed killer, produced by Bayer-owned Monsanto, needs a cancer risk warning label.
The solicitor general said in a Monday filing that the Environmental Protection Agency has for years said that glyphosate, a chemical used in Roundup, is “not likely to be carcinogenic in humans,” and said the Food and Drug Administration has approved “hundreds of labels for Roundup” that did not include any information about cancer.
Bayer has argued that since federal agencies have determined the chemical doesn’t require a cancer warning, customers should not be able to sue for violating state laws regarding a failure to warn customers about cancer risks. Bayer said most of the tens of thousands of outstanding lawsuits are “grounded in failure-to-warn theories,” meaning they would be invalidated by a ruling that Bayer isn’t bound by state failure-to-warn laws.
Why This Matters to Investors
Bayer-owned Monsanto faces tens of thousands of outstanding lawsuits alleging the company failed to warn about cancer risk for chemicals used in Roundup weed killer. The Supreme Court hearing Monsanto’s case and agreeing with its arguments could mean the company avoids paying out billions in settlements, while the Court disagreeing could be a win for thousands of cancer patients and their families.
Bayer said it welcomes the support. It said a ruling from the Supreme Court on whether companies can be sued for violating state laws when complying with a federal agency’s determination of a chemical’s safety would provide clarity for the company and customers. Bayer said it “continues to advance its multi-pronged strategy designed to significantly contain the litigation by the end of 2026.”
Monsanto was acquired by Bayer in 2018 for $63 billion, and a California jury held Monsanto liable just months after the deal was closed for failing to warn about Roundup’s potential cancer risks after a groundskeeper was diagnosed with cancer.
