Bayer’s Tightrope: A Stroke Drug Breakthrough Versus a $5 Billion Legal Tab

Bayer's promising pharma pipeline, led by Asundexian, clashes with mounting legal costs from glyphosate lawsuits, as a Supreme Court ruling looms.

The contrast at Bayer could hardly be starker. On one side, the company’s laboratories are churning out promising clinical data, offering a glimpse of a future less tethered to the legal quagmire that has defined its recent history. On the other, the cash register is groaning under the weight of litigation payouts, forcing a dividend so meager it barely registers on investors’ radars.

A First-in-Class Stroke Drug Clears a Major Hurdle

Bayer’s pharma division has scored a significant win with Asundexian, a Factor XIa inhibitor that cut the rate of ischemic strokes by 26% compared to a placebo in a Phase III trial. The results, published in April in the New England Journal of Medicine, come with a crucial safety advantage: among more than 12,000 participants, there was no elevated bleeding risk. That clean safety profile makes Asundexian the first drug in its class to successfully complete a Phase III study, and the U.S. Food and Drug Administration has already granted it Fast Track designation, smoothing the path toward potential approval.

Growth Engines in the Pipeline

While Asundexian is still in the regulatory queue, Bayer’s existing drug portfolio is already delivering. The prostate cancer therapy Nubeqa saw sales jump 57% last year to €2.4 billion. The kidney drug Kerendia, meanwhile, generated €829 million in revenue, and management has set a long-term annual sales target of €3 billion for the drug. An expansion into non-diabetic chronic kidney disease is on the horizon after a separate study hit its primary endpoint.

These successes are critical because Bayer is navigating a patent cliff. The revenue headwinds from the loss of exclusivity for blockbusters Xarelto and Eylea are expected to ease by the end of 2026, with the pharma division planning a return to mid-single-digit growth from 2027 onward.

The Supreme Court Wild Card

Yet for all the progress in the lab, the courtroom remains the dominant force shaping Bayer’s near-term fate. The company’s shares have shed nearly 10% over the past week, trading at €36.12, a sharp retreat from a 12-month gain of roughly 55%. The trigger was a hearing before the U.S. Supreme Court in the case of Durnell, which could determine the fate of about 80% of the outstanding glyphosate lawsuits.

Bayer expressed satisfaction with its presentation to the justices, but the market is far from convinced. Justice Brett Kavanaugh appeared sympathetic to Bayer’s argument that federal labeling rules should pre-empt state-level failure-to-warn claims. Justice John Roberts, however, pushed back, questioning the logic of that pre-emption defense. A final ruling is expected by the end of June, and the outcome will have enormous implications for the company’s legal liabilities.

A Dividend That Says It All

Against this backdrop, Bayer paid out a token dividend of €0.11 per share on Wednesday. CFO Wolfgang Nickl has been blunt about the rationale: the company needs every euro to service its debt. Net financial debt currently stands at roughly €30 billion and is expected to edge higher this year, potentially reaching €33 billion. Free cash flow is projected to be negative by as much as €2.5 billion in 2026, as the company budgets around €5 billion for litigation costs alone.

Shareholder Fractures Over the Path Forward

The tension between Bayer’s operational promise and its financial drag has split its investor base. At the recent annual general meeting, Deka called for an open-ended review of the corporate structure, including possible breakups. Union Investment, by contrast, backs the current strategy and warns against taking on too many simultaneous restructuring projects. The DWS is pushing for faster change. Marc Tüngler of the DSW shareholder association summed up the frustration: “Our cash flow isn’t going to the future, where it belongs, but to the past.”

The Next Checkpoint

Bayer will release its first-quarter report on May 12. That will provide the first concrete look at whether Nubeqa and Kerendia can sustain their momentum. For the full year, management is targeting revenue of up to €47 billion and an operating result of no more than €10.1 billion. Until then, investors are left watching two clocks: one counting down to the Supreme Court’s decision, the other ticking toward the patent cliff’s end.