Bayer’s Legal Tangle Deepens as Judge Blasts $7.25B Roundup Accord and Pharma Slumps

A federal judge in California has delivered a devastating broadside against Bayer’s proposed $7.25 billion glyphosate settlement, calling the agreement “dirty” and accusing the company of enriching a handful of plaintiff lawyers at the expense of genuinely injured claimants. The scathing rebuke from US District Judge Vince Chhabria, who oversees the multidistrict litigation against Monsanto, casts fresh uncertainty over Bayer’s efforts to put the Roundup saga behind it. The ruling also raises the stakes for the company’s first-quarter earnings report, due Tuesday morning, where investors already expect a weak showing from the pharmaceuticals unit.

Chhabria’s criticism centers on the lack of transparency in the settlement process. Other attorneys representing cancer patients were not consulted before a Missouri court granted preliminary approval, and they now argue the deal shortchanges the very people it is supposed to compensate. While the judge has yet to formally reject the pact, his tone during a recent hearing signals that significant reworking or outright collapse is possible. That outcome would leave Bayer exposed to the more than 65,000 remaining lawsuits, with a ticking clock for claimants to decide by June 4, 2026 whether to accept the terms or litigate independently.

Earnings Preview: Agriculture Holds Up While Drugs Waver

Against this legal turbulence, Bayer’s operational picture is mixed. For the first quarter, analysts forecast group revenue of roughly €13.44 billion, a 2% drop year-on-year, with adjusted EBITDA sliding 4% to €3.93 billion. The core earnings per share are expected to come in at €2.21, an 11% decline. The biggest drag is the pharma division, where sales are seen falling 5% and adjusted EBITDA could tumble as much as 16%. Agriculture, by contrast, is projected to deliver stable revenue and better margins, providing a partial offset.

Should investors sell immediately? Or is it worth buying Bayer?

Currency headwinds remain a persistent burden. Bayer budgets for negative exchange-rate effects to shave €1.3 billion off full-year sales and roughly €500 million from operating profit. Still, management sticks to its annual guidance: EBITDA before special items of €9.6–€10.1 billion and adjusted earnings per share of €4.30–€4.80.

A $2.45 Billion Bet on Eye Care

While legal and earnings pressures dominate headlines, Bayer is quietly shoring up its pipeline. Earlier this month it announced the full acquisition of Perfuse Therapeutics, a biopharmaceutical company focused on eye diseases such as glaucoma. The deal is worth up to $2.45 billion, with an upfront payment of $300 million and the remainder tied to milestones. The move is a direct response to the erosion of Eylea, Bayer’s blockbuster eye-drug whose patent has expired, allowing cheaper copycat products to steal market share. The candidate PER-001 now becomes central to the company’s ophthalmology strategy.

The Supreme Court Wild Card

The final word on glyphosate liability now rests with the US Supreme Court. Oral arguments have been completed, and a decision is expected this summer on the doctrine of federal preemption. If the justices rule in Bayer’s favour, federal regulatory approval could shield the company from state-level claims, potentially neutering the vast majority of outstanding cases. But a negative outcome would amplify the legal and financial drag. Bayer already expects litigation-related cash outflows of around €5 billion in 2026 alone, which is likely to push free cash flow negative this year.

The stock, which has rallied roughly 55% over the past twelve months, currently trades at €37.15—broadly flat on the day but down about 7% over the past month. The relative strength index (RSI) stands at 76.7, signalling that the shares are overbought in the near term. With Q1 results due at 7:30 a.m. Tuesday and the judge’s blistering critique fresh in mind, the market is bracing for a volatile session.

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