Bayer’s massive acquisition of Monsanto in 2018 was a push to solidify its position as a global agricultural powerhouse. But the Monsanto deal came with major baggage — a mountain of lawsuits related to its glyphosate-based weed killer Roundup.
Allegations that the product caused non-Hodgkin lymphoma have since led to billions in settlements — funds that might otherwise have gone toward drug development or other business investments. Bayer’s legal quagmire with Monsanto has been so perilous, the deal is considered a cautionary tale in M&A.
But with a renewed emphasis on generating growth through its pharma business, Bayer is looking to put its Monsanto troubles in the rearview.
In February, the company announced a new proposed class settlement of $7.25 billion to resolve thousands of current and future lawsuits. The company also agreed to a separate, undisclosed pact addressing additional claims.
At the same time, Bayer also faces a critical showdown with the U.S. Supreme Court.
“The class settlement and Supreme Court case are both necessary to help bring the strongest, most certain and most timely containment to this litigation,” said Bill Anderson, CEO of Bayer, in a press statement.
Bayer’s quest to transform
Anderson was appointed to help lead the company through this turbulent period and has cut costs and laid off some 12,000 people globally amid a major restructuring. At one point, leadership even considered, but ultimately opted against splitting up the company to right the ship.
Even with an anticipated solid performance in 2026, Bayer leaders predict a negative free cash flow this year as they make litigation-related payouts. Despite this weighty burden, Bayer leaders are optimistic that 2027 could finally mark a turning point in the company’s financial revival.
But forward momentum has been challenging as lawsuits continue to roll in. A favorable ruling from SCOTUS will largely put a stop to new claims.
The court is scheduled to hear oral arguments in Monsanto Company v. Durnell this April. The justices will decide whether state-level lawsuits can challenge the product’s safety, even though the Environmental Protection Agency determined it does not cause cancer, and did not require a cancer warning on its label.
A Missouri jury awarded the plaintiff in the case, John Durnell, $1.25 million in damages after agreeing the company failed to warn him that the product caused non-Hodgkin lymphoma — teeing up a Supreme Court decision on whether the claim filed under the state failure-to-warn law trumps the federal EPA labeling decision.
The Trump administration has signaled support for Bayer’s position. In a supporting brief, U.S. Solicitor General John Sauer said that if the Supreme Court finds in favor of the plaintiff, juries will be allowed to ignore the EPA’s expert scientific decisions.
Lawyers for the other side argue that state-level lawsuits need to be able to challenge the validity of federal decisions and ensure accountability from manufacturers.
A ruling in the case could come by the end of the court’s session in June, according to Bayer.
The $7.25 billion Bayer settlement is also awaiting final approval, which could come at a hearing scheduled for July. A Missouri court has already granted preliminary approval.
Bayer’s road ahead
While the company has presented a largely sanguine outlook for its trajectory, some analysts say the turnaround still faces some potential hurdles.
Fitch Ratings expressed caution about the company’s prospects due to lingering uncertainties related to lawsuits and weaknesses in the pharma and crop sides of the business. The analysts note, however, that earnings could start to accelerate on the pharma side in 2028, driven by Bayer’s cancer treatment Nubeqa, which could be one of the company’s top-performing drugs of all time, and its potential blockbuster Kerendia, a kidney and heart medication. These emerging treatments could also offset exclusivity losses related to Xarelto, Eylea and Adempas, according to Fitch.
Bayer has also built the strongest pipeline of its 100-year history, Christine Roth, the company’s head of global product strategy and commercialization, told PharmaVoice earlier this year. This could provide the sturdy base needed to fuel its financial rebound, provided it can put its Monsanto problems behind it.
