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Bayer CEO stands by glyphosate safety, vows to appeal Roundup ruling

Bayer AG CEO Werner Baumann, in the company's Nov. 13 earnings call, stood by the safety of glyphosate, the active ingredient in its unit Monsanto Co.'s weed-killer Roundup, saying the chemical is harmless when used properly.

"Glyphosate is safe when used as directed as confirmed by more than 800 scientific studies, decades of practical experience, and the assessment of regulatory authorities around the world," Baumann said.

In August, a jury awarded DeWayne Johnson $289 million in damages in a case before San Francisco's Superior Court of California after the former school groundskeeper claimed that Roundup caused his non-Hodgkin's lymphoma, a type of blood cancer. Bayer assumed the case after acquiring Monsanto, the world's top seed company, in June for $62.5 billion.

Bayer asked California Judge Suzanne Bolanos to either overturn the verdict or reduce the damages, with the judge eventually agreeing to the latter option. Johnson accepted the reduced award of $78 million on Nov. 1.

Bayer is facing lawsuits from about 9,300 plaintiffs in the U.S. accusing the company's Roundup of causing cancer, mostly non-Hodgkin's lymphoma, and the German drug and chemicals company is expecting that number to rise.

"We are convinced that we have meritorious defenses and intend to defend ourselves vigorously in all of these lawsuits," Baumann said. The chief executive added that the Johnson case is a single judgment in a court of first instance and is not binding for the other lawsuits.

Baumann said the company is about to submit an appeal to the California court and the process could take between one to two years.

"When it comes to product liability, we have a normal amount of insurance," Baumann said. "We will defend ourselves with all the means at our disposal."

Call for support

Baumann said the company could also benefit from support from the media when it comes to contextualizing the effects of glyphosate.

"You are very important multipliers for us. Should you convey an actual picture that is available to us and at the end of the day available to you," Baumann said. "A lot of what we do is taken out of context, and I can only implore that you put all of these in the right context."

During the call, a journalist pointed out that Bayer and Monsanto employees previously mentioned that glyphosate could never cause cancer, as opposed to Baumann saying the chemical is safe when used properly.

Baumann responded by saying that all products are subject to proper use.

"Glyphosate, in terms of its chemical make-up is an extremely safe product, otherwise it wouldn't have been used in the last 40 years repeatedly despite the increasingly tight regulatory requirement — it would never have been approved. Its mechanism with the enzyme which takes an effect on photosynthesis is something that makes it safe for both humans and animals because it only impacts plants," Baumann said.

Expanding the pipeline

Bayer's third-quarter core net income from continuing operations fell to €1.17 billion, or €1.19 per share, from €1.29 billion, or €1.45 per share, a year earlier. However, the company's pharmaceutical sales rose 2.4% year over year on a reported basis to €4.16 billion, with Bayer's best-selling blood-thinning drug Xarelto booking sales of €933 million.

In terms of its drug pipeline, Baumann said the company is looking for attractive products to either acquire or license — using example of its partnership with Loxo Oncology Inc. in the development of cancer drug larotrectinib as a success story.

"[Larotrectinib] is a highly differentiated cancer product and this can be used for a whole number of different types of tumors," Baumann said. "We want to add more to our pipeline so we can have a stronger pipeline in the years to come."

Larotrectinib, a potential treatment for different types of lung and thyroid cancers, is undergoing priority review by the U.S. Food and Drug Administration, with the regulator expected to decide on the therapy's approval by Nov. 26. Bayer is also seeking EU approval for the drug.