Bayer's Legal Cloud and Kidney-Drug Bet Collide at a Technical Crossroads

Bayer shares close at EUR 42.95 as FDA accepts Kerendia review, but a US appeals court refuses to dismiss Roundup lawsuits ahead of Q3 results.

Bayer finds itself squeezed between two competing narratives: a pharmaceutical pipeline that keeps delivering regulatory wins, and a US legal quagmire that refuses to loosen its grip. The tug-of-war was on full display in the latest session, when the stock gave up 2.1% to close at EUR 42.95, dragged down by a broadly weaker German equity market. Rising bond yields, firmer oil prices and political jitters surrounding France weighed on blue chips across the board, pushing the Leverkusen-based group's shares to a fresh multi-month low.

That pullback lands in an already delicate stretch. Year-to-date the stock is still up 16%, but the headwind has clearly stiffened. Investors now face a familiar fork in the road: was the sell-off merely a market-driven overreaction, or do fundamental obstacles ahead of the next round of corporate news spell the end of the recent rally?

A Regulatory Green Light for Kerendia

On the operational front, Bayer has something concrete to show. The US Food and Drug Administration has accepted for review the supplemental application for Kerendia, whose active ingredient is finerenone, targeting adults with chronic kidney disease who do not have diabetes. The filing rests on data from the Phase III FIND-CKD trial, which enrolled 1,584 adult participants.

Should the agency grant the expanded indication, Bayer could widen the patient pool for Kerendia considerably. In the United States alone, more than 37 million adults live with chronic kidney disease, and an estimated 50% to 70% of them have no accompanying diabetes. Until now, finerenone's use has been largely confined to patients with type 2 diabetes. Cracking this new segment would open a market that has so far benefited from few targeted treatment options — and could visibly accelerate the drug's revenue trajectory.

The clinical case looks solid. In the underlying Phase III study, Kerendia met its primary endpoint: the annual decline in kidney function, measured by estimated glomerular filtration rate, reached minus 3.3 versus minus 4.0 ml/min/1.73 m² on placebo through month 32. Among participants, 56% had a glomerular disorder and 30% a hypertensive or ischemic nephropathy. The secondary combined kidney and cardiovascular endpoint also showed a statistically significant advantage for the active ingredient. Known side effects persist, however: hyperkalemia occurred in 17% of treated patients versus 13.3% on placebo in the registration trial.

Cardiology Pipeline Adds Ballast

Additional support comes from Bayer's cardiology pipeline. At the annual meeting of the Heart Failure Society of America in Phoenix, running from today, October 9, through October 12, the company is presenting fresh analyses. These include a late-breaking presentation on the Phase III REVEAL trial for the diagnostic PET tracer evuzamitid, under investigation for visual assessment of cardiac amyloidosis. The agent holds breakthrough therapy status in the US and orphan drug status in both the US and the EU.

In parallel, Pulmovant is advancing mosliciguat, an active ingredient Bayer acquired, in a global Phase III trial for pulmonary hypertension stemming from lung disease, after a Phase II study demonstrated a marked reduction in pulmonary vascular resistance.

Elsewhere in the pharma division, Lynkuet received priority review status from the FDA for treating vasomotor symptoms in breast cancer patients undergoing endocrine therapy. Cell therapy efforts are also gaining traction, with the candidate lemiretprocel from subsidiary BlueRock Therapeutics granted orphan drug status in the US and Europe. To underpin future growth, Bayer plans a USD 2.2 billion investment in a new production site in New Albany, Ohio. Together with the recent appointment of Dr. Christoph Koenen as Chief Medical Officer, these moves could set the stage for a fundamental re-rating of the pharma unit over the medium term.

Roundup Litigation Refuses to Budge

The legal overhang, by contrast, shows no sign of clearing. A US appeals court declined Bayer's attempt to dismiss thousands of lawsuits tied to the glyphosate-based weedkiller Roundup, extending the litigation indefinitely. Absent a final legal resolution or a comprehensive settlement, further trial costs and unpredictable damage awards loom. That uncertainty ties up capital and hampers any re-rating of the stock on international markets.

Operational risks abroad add to the picture. Ukraine recently saw temporary supply shortages of certain Bayer medicines after attacks damaged energy, transport and storage infrastructure, compounded by internal logistics problems. The company has since imported the shipments and expects a gradual normalization in the second half of October once inspections are complete. Still, such episodes lay bare the fragility of supply chains in crisis regions.

Farm Unit Under a Cloud Before November 3

The pivotal question for the stock's next leg concerns the operational health of the agricultural division ahead of its next milestone. On November 3, 2026, the group will publish full third-quarter results. In recent weeks, doubts have grown over whether original expectations for the quarter were set too high. Analyst Richard Vosser of JPMorgan noted in late September that early forecasts for the third quarter may have been overly optimistic, pointing to the timing of the agricultural business as the main reason. Investors must now weigh whether seasonal shifts and a tough market environment for the division will hit group earnings harder than previously reckoned — or whether the earnings base holds firm.

Financing costs remain a persistent valuation factor as well. A backdrop of sustained high interest rates hits capital-intensive companies especially hard. Bayer did place hybrid bonds worth around EUR 2 billion about two weeks ago, with maturities of six and nine years, but refinancing expenses stay on the radar. Should upcoming quarterly figures confirm continued earnings weakness in agriculture, the downtrend could entrench itself. A mix of disappointing margins and macroeconomic pressure might prompt institutional investors to trim their exposure further — and in that scenario, even welcome drug approvals would be overshadowed in the short term by fundamental worries about the core divisions.

What to Watch From Here

Technically, the stock is testing a key level. As long as it can defend its 200-day moving average of EUR 43.24, a stabilization remains within reach. If sentiment sours further on fresh setbacks in US courtrooms, a renewed test of lower valuation levels beckons. Holding above the 52-week low and absorbing the recent market-wide shocks would keep the chance of a rebound alive; a sustained break of recent interim lows would open the door to further declines.

The next concrete catalyst for the pharma division arrives with the detailed study data due by October 12 at the Phoenix conference. Investors should also track the FDA's next steps in the Kerendia review. The decisive factor for a lasting re-rating will ultimately be whether the growth contributions of new medicines can outpace the pace at which legacy burdens are worked off.