FRANKFURT (Reuters) - Shares in Germany's Bayer's fell more than 12 percent on Wednesday after a second U.S. jury ruled its Roundup weed killer caused cancer.
Tuesday's unanimous jury decision in San Francisco federal court was not a finding of Bayer's liability for the cancer of plaintiff Edwin Hardeman. Liability and damages will be decided by the same jury in a second trial phase beginning on Wednesday.
Bayer, which denies allegations that glyphosate or Roundup cause cancer, said it was disappointed with the jury's initial decision. Bayer acquired Monsanto, the longtime maker of Roundup, for $63 billion last year.
Bayer shares were 12.5 percent lower at 1110 GMT, the biggest intraday loss in 16 years, wiping some 8 billion euros ($9.1 billion) off its valuation.
"This looks like 2-0 plaintiffs, and clearly not helpful for the overall payout calculus and resolution of the litigation," said Bernstein analyst Gunther Zechmann.
Glyphosate is the world's most widely used weed killer. Monsanto's Roundup was the first glyphosate-based weed killer but is no longer patent-protected and many other versions are now available. Bayer does not provide sales figures for the product.
"We are confident the evidence in phase two will show that Monsanto's conduct has been appropriate and the company should not be liable for Mr. Hardeman's cancer," the company said.
The case was only the second of some 11,200 Roundup lawsuits to go to trial in the United States. Another California man was awarded $289 million in August after a state court jury found Roundup caused his cancer. That award was later reduced to $78 million and is on appeal.
Baader Helvea analyst Markus Mayer noted that Bayer management announced ambitious targets in December.
"(It) is now under pressure to deliver and trying to avoid becoming a target for activist or strategic buyers."
Activist investor Elliott already holds a stake of less than 3 percent in Bayer, Reuters disclosed last year.
Brokerage Warburg lowered its recommendation to "Hold" from "Buy", arguing that the with the renewed setback upcoming glyphosate court cases would remain a drag on the share price.
Bayer had claimed that jury was overly influenced by plaintiffs' lawyers allegations of corporate misconduct and did not focus on the science.
U.S. District Judge Vince Chhabria called such evidence "a distraction" from the scientific question of whether glyphosate causes cancer. He split the Hardeman case into two phases: one to decide causation, the other to determine Bayer's potential liability and damages.
Under Chhabria's order, the second phase would only take place if the jury found Roundup to be a substantial factor in causing Hardeman's non-Hodgkin's lymphoma. The jury found that it was on Tuesday.
Union Investment fund manager Markus Manns cautioned that it was too early to read anything into individual rulings in courts of first instance.
"What will be important for Bayer is the outcome of the appeals hearings," he told Reuters, adding that Bayer should not yet engage in settlement talks.
Chhabria has scheduled another bellwether trial for May and a third trial is likely to take place this year. All three cases will be split into causation and liability phases.
The U.S. Environmental Protection Agency, the European Chemicals Agency and other regulators have found that glyphosate is not likely carcinogenic to humans. But the World Health Organization's cancer arm in 2015 reached a different conclusion, classifying glyphosate as "probably carcinogenic to humans."
(Reporting by Jim Christie in San Francisco; Additional reporting by Tina Bellon in New York, Patricia Gugau in Frankfurt; Writing by Tina Bellon and Arno Schuetze; Editing by Bill Berkrot and Keith Weir)