The hope at Bayer was great, but now the disappointment is even more so. The flop of an important new drug in development weighed heavily on the shares of the pharmaceutical and chemical company at the beginning of the week. On Monday the price collapsed by almost a fifth, and in the evening the shares closed at 34.01 euros – the lowest they were last seen during the financial crisis at the beginning of 2009. It is the biggest slump that Bayer has ever recorded in one day, even worse than in 2009 Debacle surrounding the weed killer glyphosate. At its peak, Bayer lost around 8.5 billion euros of its market value on Monday.
The reason for this has a name: Asundexian. The active ingredient is an anticoagulant and should be used in patients with atrial fibrillation and at risk of stroke. It was previously seen as the successor to the drug Xarelto – and like it was supposed to be a blockbuster. In the long term, according to previous information, Bayer hoped for annual sales of more than five billion euros. On Sunday evening, Bayer surprisingly announced that a phase III study investigating Asundexian would be ended prematurely. Compared to standard treatment, Asundexian shows inferior effectiveness, it said. According to previous information, Asundexian should actually be ready for use from 2026 and, according to initial data, led to significantly lower bleeding rates than the anticoagulant Eliquis from competitors Bristol-Myers Squibb and Pfizer.
“This is a severe setback for Bayer,” said Markus Manns from the fund company Union Investment, commenting on the flop. Asundexian was the pearl in Bayer’s pharmaceutical pipeline; without the active ingredient, the division would be without sustainable growth. For Manns, the handling of Asundexian is another example of the failure of risk management at Bayer. “The drug should have been partnered with a large pharmaceutical company,” said Manns. According to him, Bayer would then have received significant advance payments and shared the development costs. Similar to the Monsanto acquisition, Bayer opted for a “significantly riskier strategy”. For CEO Bill Anderson, the new beginning will be a “Herculean task.” Anderson only replaced Werner Baumann as CEO at the beginning of June.
US court imposes high penalties in glyphosate trial
Bayer suffered another defeat on Friday in the legal dispute over the weed killer glyphosate. A jury in Jefferson City, Missouri, awarded plaintiffs more than $1.5 billion. Valorie Gunther, Jimmy Draeger and Daniel Anderson, who attributed their cancer to the use of glyphosate, were awarded a total of around $61 million in compensatory damages and half a billion dollars each in punitive damages.
It was the fourth defeat in a row; Bayer had previously won nine cases. The group also wants to appeal against this ruling. “The verdict will not stand,” said a spokesman. The amount of punitive damages alone violates the American Constitution. At 25:1, the ratio of punitive damages to compensatory damages is “completely absurd.” In earlier proceedings, the punitive damages were later significantly reduced.
“Unlike previous cases, the courts in recent cases improperly allowed plaintiffs to misrepresent the regulatory and scientific facts,” said the Bayer spokesman. According to him, the plaintiffs were able to claim that there were safety concerns during the process of re-approval in the EU and the assessment by the American Environmental Protection Agency (EPA). Just last week, the EU Commission approved glyphosate for another ten years.