SEATTLE (dpa-AFX) - Bayer has suffered a severe defeat in the United States in a lawsuit over alleged health effects of the chemical PCB, which has been banned for decades. A jury in King County Superior Court in Washington State awarded former students and parents of a school in the Seattle area damages of 857 million US dollars (785 million euros).

The plaintiffs blame the environmental toxin PCB from the US manufacturer Monsanto for their illnesses. Bayer acquired Monsanto in 2018. The DAX-listed company announced in a statement that it would take legal action against the verdict. Investors on the stock market took the jury's decision in stride: Bayer shares, which had been badly shaken recently, were up slightly.

The current trial is one of several at the Sky Valley Education Center near Seattle in which juries have ruled in favor of the plaintiffs. The total amount currently demanded by the jury consists of 73 million dollars in damages and 784 million dollars in punitive damages. The latter component in particular is often significantly reduced by judges.

"We do not understand the verdict and will appeal it in order to overturn the decision and reduce the excessive damages," Bayer said. There was no objective evidence that the plaintiffs had been exposed to dangerous levels of PCBs. Moreover, Bayer had only recently won a similar case.

Like the multi-billion dollar dispute over the alleged cancer risks of the weedkiller glyphosate, the PCB lawsuits are an expensive legacy of the US seed giant Monsanto, which Bayer acquired a good five years ago for over 60 billion dollars. The company was the only manufacturer of polychlorinated biphenyls (PCBs) in the USA from 1935 to 1977. The chemical was banned there in 1979. In Germany, PCBs have not been allowed to be used since the end of the 1980s.

In view of the many PCB disputes, Bayer has long emphasized that Monsanto had actually agreed far-reaching indemnities with former customers of the chemical. "In these agreements, these companies agreed to indemnify Monsanto against the costs of possible legal disputes in return for continuing to receive PCBs in the 1970s." Bayer is also trying to enforce this in court to recover legal costs. Analyst Jo Walton from the Swiss bank UBS wrote in an initial reaction that this is probably one of the reasons why Bayer has few provisions for financial PCB risks on its balance sheet.

Bayer shares have been among the weakest stocks in the DAX so far in 2023, falling by a good third, while the DAX rose by a good fifth in the same period. Most recently, a study flop for the promising drug Asundexian - an anticoagulant in development - accelerated the downward slide of the shares. In addition, the glyphosate and PCB litigation poses potential risks worth billions.

In connection with PCBs, analyst Sebastian Bray from the private bank Berenberg referred to a landmark case at the end of November in which a decision could still be pending in 2023. If Bayer loses the Erickson case in the US state of Washington, there is the threat of further trouble in other states./mis/tav/stk