FILE PHOTO: The logo of Bayer AG is seen in a showroom of the German drugmaker where the annual results news conference takes place in Leverkusen, Germany February 27, 2020. REUTERS/Wolfgang Rattay
FRANKFURT (Reuters) – German drugs and pesticides company Bayer said the economic downturn has prompted it to take 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, it said in a statement on Monday.
“The company will consider a deal only if it is financially reasonable and puts in place a mechanism to resolve potential future claims efficiently,” 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 U.S. plaintiffs blaming its glyphosate-based weedkillers for their cancer reached 52,500, up from 48,600 in February, the company added.
Bayer denies that claims Roundup – or its active ingredient glyphosate – cause cancer, saying decades of independent studies have shown it to be safe for human use.
The company added that first-quarter adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 10.2% to 4.39 billion euros ($4.76 billion), surpassing average analyst expectations of 4.17 billion, according to Refinitiv data.
The 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 warned, however, that it was unable to assess the impact of the pandemic on group earnings this year.
Reporting by Ludwig Burger; editing by Thomas Seythal and Emma Thomasson