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Bayer says more stringent in glyphosate settlement talks due to downturn

Bayer said the economic downturn has prompted it to take a tougher stance in talks to settle claims its glyphosate-based weedkillers cause cancer
Bayer said the economic downturn has prompted it to take a tougher stance in talks to settle claims its glyphosate-based weedkillers cause cancer

Bayer said the economic downturn and the need to preserve cash means it is taking a tougher stance in talks to settle claims its glyphosate-based weedkillers cause cancer, even as its earnings rose. 

The pandemic has significantly slowed the mediation process, the German drugs and pesticides company said in a statement today. 

"The company will consider a deal only if it is financially reasonable and puts in place a mechanism to resolve potential future claims efficiently," Bayer chief executive Werner Baumann said. 

"This applies now more than ever," he added, citing a looming recession and considerable liquidity challenges as a result of the coronavirus pandemic. 

The number of US plaintiffs blaming its glyphosate-based weedkillers for their cancer reached 52,500, up from 48,600 in February, the company added. 

Bayer denies claims that Roundup - or its active ingredient glyphosate - cause cancer, saying decades of independent studies have shown it to be safe for human use. 

The company said first-quarter adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 10.2% to €4.39 billion, surpassing average analyst expectations of €4.17 billion, according to Refinitiv data.  

Bayer, which is due to hold its annual shareholder meeting in a virtual format tomorrow, warned that it was unable to assess the impact of the pandemic on results this year. 

The first-quarter beat was driven by a 14% gain in earnings at the agriculture division from higher sales of crop chemicals and corn seeds.

Earnings were further underpinned by a 19% increase in revenue from stroke prevention drug Xarelto. 

Bayer also pointed to the stockpiling of drugs as consumers purchased over-the-counter products and patients sought additional prescriptions as a safety net as the coronavirus spread. 

Operating cash flow, however, fell to an outflow of €189m, down from an inflow of €1 billion a year earlier, as it brought forward the settlement of agriculture payables and receivables were paid later.