Bayer Aktiengesellschaft 

Period: 05/23/2016 to 03/19/2019
Lead Plaintiff Deadline: 09/14/2020

SUMMARY OF CASE:

A securities class action has been filed against Bayer Aktiengesellschaft  (BAYRY) on behalf of investors in Bayer American Depositary Receipts (“ADRs”) between May 23, 2016, and March 19, 2019.  This case has been filed in the USDC – N.D.CA.

Bayer is a multinational pharmaceutical and life science company.  On May 23, 2016, Bayer announced that it had made an unsolicited all-cash offer to acquire Monsanto Company (“Monsanto”)—a U.S. based provider of agricultural chemicals and other products.  On June 7, 2018, after a protracted regulatory approval process, Bayer completed its acquisition of Monsanto for $63 billion in cash (the “Acquisition”).  The claims alleged in this case arise from Defendants’ misrepresentations and omissions regarding the significant liability risk from lawsuits brought against Monsanto alleging that Monsanto’s flagship weed killer product, Roundup, caused cancer, including non-Hodgkin’s lymphoma—a lethal blood cancer.

The complaint alleges that, throughout the Class Period, Defendants made false and misleading statements to investors, describing the Acquisition as “a compelling transaction for shareholders” that would create “significant value” by generating “stronger growth, better profitability, and a more resilient business profile” and “will translate into attractive financial benefits for Bayer and its shareholders.”  Defendants specifically downplayed the liability risks related to Monsanto’s Roundup product, emphasizing that the Company conducted a “thorough analysis” during due diligence and “undertook appropriate due diligence of litigation and regulatory issues throughout the process” which led Bayer to finalize the Acquisition.  As a result of Defendants’ misrepresentations, Bayer ADRs traded at artificially inflated prices during the Class Period.

The truth emerged through a series of disclosures beginning on August 10, 2018, when a California state court jury in the first Roundup cancer case to proceed to trial found unanimously that Roundup was a “substantial factor” in causing the plaintiff to develop non-Hodgkin’s lymphoma and that Monsanto knew, or should have known, the risks associated with exposure to the chemical and failed to warn of this severe health hazard.  The jury also found that Monsanto acted with “malice or oppression” and should be punished for its conduct.  Accordingly, the jury ordered Monsanto to pay $39 million in compensatory damages and $250 million in punitive damages.

On October 22, 2018, although the court in that case reduced the award of punitive damages from $250 million to $39 million, the court otherwise denied Monsanto’s motion for judgment notwithstanding the verdict and Monsanto’s motion for a new trial, and upheld the jury’s verdict that the plaintiff’s exposure to Roundup was a substantial factor in causing his cancer.

Then, on March 19, 2019, a jury in the first federal Roundup cancer lawsuit to proceed to trial issued a verdict on causation in phase one of the bifurcated trial, finding that plaintiff’s “exposure to Roundup was a substantial factor in causing his non-Hodgkin’s lymphoma.”  As a result of these disclosures, the price of Bayer ADRs declined precipitously.