Bayer Navigates Conflicting Signals: FDA Priority on Kerendia Offsets New Threat to $7.25 Billion Roundup Deal

Legal maneuver to move Roundup settlement to federal court threatens Bayer's timeline, overshadowing FDA priority review for kidney drug Kerendia and stable Q1 sales.

A fresh legal challenge to the multibillion-dollar Roundup settlement plan has cast doubt on Bayer’s carefully calibrated timeline, even as the company logged an FDA priority review for its kidney drug Kerendia and reported stable first?quarter sales. The competing narratives left the stock on the defensive, with shares slipping 2% to €38.39 on Friday – just beneath the 50?day moving average of €38.91.

The FDA’s decision to accept and fast?track the supplemental application for finerenone (Kerendia) offers a rare dose of positive news. The application, backed by the FINE?ONE study, showed the drug significantly reduced the urine albumin?to?creatinine ratio in adults with type?1 diabetes over six months. That advance, however, is overshadowed by a legal gambit that threatens to derail the agreement with plaintiffs over non?Hodgkin lymphoma claims.

A lawyer opposing the settlement filed documents on Friday seeking to move the case from Missouri state court to a federal court – a move Bayer called groundless. The company wants the proceeding to remain in state court, where the settlement plan covering the bulk of current and future Roundup claims was provisionally approved. If the jurisdictional challenge gains traction, it could push back the fairness hearing scheduled for 9 July and disrupt the 4 June opt?out deadline for affected plaintiffs.

Bayer has structured the settlement as a backstop: it can walk away if too many claimants exit. The leverage is reinforced by a separate Supreme Court case (Durnell) that could bar thousands of future lawsuits. The court is expected to rule by the end of June, though some market participants have pencilled in a decision by the end of July. A favourable ruling would eliminate the majority of outstanding claims, leaving the settlement to cover only those that survive.

The two tracks are independent but complementary, and the financial stakes are already showing up in the company’s cash flow. Adjusted free cash flow for the first quarter stood at minus €318 million. Including litigation outflows – chiefly for glyphosate and PCB settlements – the figure plunged to minus €2.32 billion. Revenue rose 4.1% on a currency?adjusted basis to €13.4 billion, while adjusted EBITDA increased 9% to €4.45 billion. Bayer confirmed its full?year guidance, which forecasts a reported free cash flow between minus €2.5 billion and minus €1.5 billion.

CEO Bill Anderson has promised investors that the legal overhang will be substantially resolved this year, regardless of the Supreme Court outcome. But the new state?to?federal maneuver adds a layer of uncertainty just as the settlement was entering its final stretch. The next three milestones are clearly etched: the opt?out deadline on 4 June, the Supreme Court verdict by late June or July, and the 9 July fairness hearing. Whether this week’s filing disrupts that calendar – or simply adds noise – will soon become clear.