Bayer has agreed to a $7.25 billion deal to settle tens of thousands of lawsuits that its weedkiller Roundup caused cancer.
The big picture: Bayer — which acquired Roundup when it bought Monsanto in 2018 — announced Tuesday that it'll compensate people who allegedly suffered non-Hodgkin lymphoma due to exposure to Roundup.
- The German drug giant and crop science company had originally reached a $10 billion settlement in 2020 that covered short-term claims up to four years — but that deal was later scuttled amid legal scrutiny over the claims process.
- The new compensation deal covers claims for up to 21 years.
- The company didn't disclose the average amount expected to be distributed to each recipient.
Zoom out: The latest deal comes as Bayer awaits a Supreme Court ruling that CEO Bill Anderson has said could determine whether Roundup stays on the market in the U.S.
- Anderson told Axios in May that the ruling was critical because the company was facing "crazy regulatory ambiguity" stemming from a dispute between federal and state laws governing the product.
Between the lines: The prospect of a pro-Bayer Supreme Court ruling appears to have worked in the company's favor in negotiations.
- The new settlement terms "are highly favorable to Bayer and serve as a hedge against the downside risk in the unlikely event of an unfavorable Supreme Court ruling," Capstone analyst Walker Livingston wrote Tuesday in a research note.
- Livingston said it's 80% likely the company will prevail in the case.
- "A positive ruling on the question before the Supreme Court should largely foreclose present and future claims based on state label-based warning theories," Bayer said in a statement, adding that the settlement will resolve claims "regardless of legal theory."
The impact: Bayer's stock rose 6% Tuesday.
