Earnings

November 20, 2023

The Bayer Of Bad News

Germany’s Bayer was the bearer of bad news for investors today, with shares experiencing their largest one-day decline in over three years. 📉

The pharma and biotech company aborted a large late-stage trial testing a new anti-clotting drug due to a lack of efficacy. While failures are common in this field, this was the company’s most promising development project. Its statement says that the experimental anticoagulant asundexian was shown to be inferior to Bristol-Myers Squibb and Pfizer’s established treatments. ❌

And if that wasn’t bad enough, regulators also ordered the company to pay $1.56 billion in the latest U.S. lawsuit over its commonly-used Roundup weedkiller. A Missouri jury ordered the payout to four plaintiffs who claimed the product caused injuries, including cancer. Ultimately, it found that Bayer’s Monsanto business was liable for claims of negligence, design defects, and failing to warn plaintiffs of the potential dangers of using Roundup.

As a result of the many setbacks, new Bayer CEO Bill Anderson is reportedly weighing options to break up the company. Splitting the business into three parts: prescription drugs, consumer health products, crop chemicals and seeds, along with cost-cutting, could help revive its share price. ✂️

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