Bayer’s Pharma Pipeline Gains Urgency as $7.25 Billion Settlement Stumbles Again

Bayer shares fall 1.81% as plaintiffs move to vacate $7.25B Roundup settlement, while FDA grants priority reviews for three drug candidates, offset by solid Q1 results and a $2.45B acquisition.

Bayer’s attempt to close the book on its glyphosate litigation hit a new legal snag just as the company’s pharmaceutical division reeled in three priority reviews from the US Food and Drug Administration. The contrasting developments leave investors weighing near-term legal headwinds against a steadily maturing drug pipeline, with the stock reflecting the tension: Bayer shares slipped 1.81% on Thursday to €37.35, still 22.6% below their 52-week peak of €49.17.

Lawyers representing 13 cancer patients have filed a motion in a Missouri court to vacate the proposed $7.25 billion class settlement that Bayer had hoped would put the Roundup saga behind it. The plaintiffs argue that the agreement was the result of improper coordination between Bayer and lead attorneys, and that the court lacks the authority to bind claimants from other states. They also point to deliberately high opt-out hurdles that make it difficult for individuals to pursue their own cases. A further point of contention is the $675 million in legal fees earmarked for the lead counsel. Judge Timothy Boyer gave the settlement preliminary approval in March, but his final ruling is not expected until July 9. Separately, US District Judge Vince Chhabria, who oversees thousands of coordinated glyphosate claims, has expressed serious doubts about the fairness of the process.

Against that legal backdrop, Bayer’s drug pipeline delivered a bright spot. Within a matter of days, the FDA granted Priority Review status to three of the company’s candidates. Asundexian, an oral Factor XIa inhibitor designed to prevent ischemic stroke, was accepted under the accelerated pathway based on the phase III OCEANIC-STROKE trial. If approved, it would become the first FXIa inhibitor cleared specifically for secondary stroke prevention. Japan’s health ministry also accepted the filing. Next came Kerendia (finerenone), for which the FDA granted a speedy review in adults with type 1 diabetes and chronic kidney disease — a potential first new therapy in that indication in more than 30 years. Kerendia is currently only approved for type 2 diabetes; an expansion would significantly widen the eligible patient pool. Bayer expects a decision within roughly six months. The third Priority Review went to Hyrnuo, proposed as a first-line treatment for HER2-mutated non-small cell lung cancer.

Bayer also bolstered its ophthalmology portfolio in May 2026 with the planned acquisition of Perfuse Therapeutics. The deal carries a total value of up to $2.45 billion, including a $300 million upfront payment plus milestones. The main asset is PER-001, a phase II candidate for glaucoma and diabetic retinopathy. Completion is subject to antitrust clearance.

The operational business, meanwhile, delivered a solid first quarter. Group sales rose 4.1% on a currency-adjusted basis to €13.4 billion, while adjusted EBITDA climbed 9% to €4.45 billion. Net profit doubled to €2.76 billion. But the bottom line was overshadowed by persistent cash outflows tied to legal settlements. Free cash flow swung to minus €2.32 billion in the first three months of 2026, driven by net payments of €2 billion for PCB and glyphosate cases. Bayer now expects a negative free cash flow of around €5 billion for the full year. Net financial debt stood at €32.5 billion as of March 31, financed through an €8 billion credit line and bond issuance.

Analysts have responded to the pipeline progress and the easing of legal risk — at least relative to earlier worst-case scenarios — by nudging up their targets. DZ Bank upgraded Bayer from Hold to Buy and raised its price target to €51 from €44. Barclays maintained an Overweight rating and increased its target to €50 from €48, noting that the stock’s direction now hinges on the glyphosate rulings expected this month.

The fundamental dilemma for Bayer remains the same: a promising pharmaceutical pipeline is gaining translational momentum, but the balance sheet remains stretched by litigation costs and a debt load that limits strategic flexibility. The final decision on the class settlement is due in July. Until then, the shares are caught between pipeline optimism and the looming risk that the glyphosate chapter still refuses to close.