Tyler Durden
"Bayer shares in Germany experienced their largest-ever intra-day crash, tumbling as much as 21% to lows not seen since the Great Financial Crisis, following a double whammy of news:
- First, Bayer AG's Monsanto unit was ordered by a Missouri jury to pay more than $1.5 billion damages to three former users of its Roundup weedkiller on Friday.
- Second, on Sunday, the German agropharmaceutical giant halted the development of an experimental drug because of a lack of efficacy.
Over the weekend, we explained that Monsanto's largest trial loss in the five-year litigation over Roundup weedkiller was devastating. There appears to be no end as the company faces a second wave of lawsuits. It has already set aside $16 billion for the Roundup lawsuits. Also, this is a historic value destruction, who purchased Monsanto for $63 billion five years ago.
Meanwhile, Bayer said Monday its pharma division halted the primary study of its top experimental drug because of a lack of efficacy.
Bayer wrote in a statement that in a Phase III trial, its experimental anticoagulant asundexian was inferior to Pfizer and Bristol-Myers Squibb's Eliquis drug in preventing strokes in high-risk patients.
Bayer was positioning asundexian to replace revenue from blood thinner Xarelto, one of its biggest sellers, which will lose protection from European patents in two years.
Jefferies analyst Charles Bentley said, 'This is a significant blow to the Bayer Pharma pipeline... Overall, this setback increases challenges facing its new CEO [Bill Anderson] –pipeline weakness and needing investment while leverage is high and beset by litigation.'
As a result of the two crises, Bayer shares in Germany crashed as much as 21% to the lowest levels since March 2009. Around 0800 ET, shares recovered some losses but were still down 19%. "