Bayer’s Stock Treads Water as Operational Recovery Collides with Legal and Trade Risks

Despite a 43% annual gain, Bayer shares lag 24% below highs as CEO Anderson’s overhaul, glyphosate litigation, and a U.S. trade probe temper investor optimism.

For all the activity at Bayer in recent weeks—a $300 million biotech acquisition, a lawsuit against Johnson & Johnson, and a fresh trade investigation—the company’s shares have barely budged. The stock has advanced 43% over the past twelve months, reflecting cautious optimism in the turnround story peddled by CEO Bill Anderson. Yet at €37.81, the shares remain roughly 24% below their 52-week high of just under €50, and last week’s 4.36% gain was not enough to push them decisively out of their recent range.

Behind the stagnating price lies a business in the midst of deep structural change. Since taking over in 2023, Anderson has slashed roughly two-thirds of management positions in a bid to create a leaner, faster organisation. The short-term cost of this overhaul is real, but the company expects tangible savings to materialise by 2026—a deadline that investors are watching closely. The dividend has already been cut to the legal minimum, a painful but necessary step to pay down debt and restore financial flexibility. Meanwhile, the pharma pipeline offers genuine promise: Darolutamid, an androgen-receptor inhibitor for prostate cancer; the anticoagulant Asundexian; and the contrast agents Gadoquatrane and Beyonttra are all in clinical development and could drive meaningful revenue growth later this decade. Bayer is targeting mid-single-digit revenue growth for its pharma division by 2027 and an operating margin heading toward 30% by 2030. The agriculture division, too, has outperformed expectations, with organic growth in seeds providing a rare bright spot.

But the biggest cloud over the recovery remains legal. The glyphosate litigation continues to weigh on cash flow, and the US Supreme Court is expected to rule by the end of June on a key case that could determine Bayer’s long-term liability. Also landed on Bayer’s doorstep is a Section 301 investigation initiated by the US Trade Representative on 18 June, which will examine whether German drug-pricing rules discriminate against American commerce. As Germany’s largest pharmaceutical manufacturer, Bayer stands squarely in Washington’s crosshairs.

Adding to the complexity, the company has been active on the deal and litigation fronts. On 17 June, Bayer closed the acquisition of Perfuse Therapeutics for an upfront payment of $300 million, a deal that could reach $2.45 billion including milestones. The centrepiece is PER-001, an intravitreal implant in Phase II trials for glaucoma and diabetic retinopathy, representing a targeted expansion of Bayer’s ophthalmology pipeline. Separately, a lawsuit filed against Johnson & Johnson in February alleges misleading advertising for Erleada, a prostate-cancer drug that J&J claims reduces the risk of death by 51% versus Bayer’s Nubeqa. A US district judge in April denied Bayer’s request for a preliminary injunction, but the case continues.

Two key events in the coming weeks will test whether the stock can sustain its recent recovery. The Supreme Court’s glyphosate ruling—due any day now—could either lift or deepen the uncertainty that has haunted Bayer for years. Then, on 4 August, the company will report second-quarter earnings, providing the first concrete look at how the turnround is tracking. With the shares trading just above their 50-day moving average, the next few weeks will determine whether Bayer’s operational progress can finally overcome the legal and regulatory headwinds that have kept the stock in place.