Good morning, MBA readers,
Bayer spent much of the past year playing whack-a-mole against tens of thousands of lawsuits related to Monsanto herbicide Roundup, but the latest development in one of these cases suggests the court battles may be drawing close to a climax.
On Monday, the judge presiding over the latest Roundup trial in St. Louis reportedly announced that the case will not resume. She did not immediately explain why, reports say, but the announcement follows a delay in the trial last week to allow attorneys to hammer out a potential settlement agreement.
At the center of the case is glyphosate, a widely used herbicide created and marketed by Monsanto as Roundup. Over the years, it became a favorite among American farmers until weeds began evolving and developed a resistance to the substance. But it’s not Roundup’s waning effectiveness that’s on trial. Rather, tens of thousands of farmers and gardeners contend that the product caused their cancer. In the past year, the lawsuits multiplied to an estimated count of 75,000 claimants, according to the lead mediator in the cases.
As the lawsuits have piled up, Bayer’s stock has cratered. The German company’s shares have plunged 32% since around the time it purchased Creve Coeur-based Monsanto in 2018. In fact, the pressure to quickly resolve the lawsuits is so enormous that Bayer may be willing to make some reluctant concessions. One German outlet reported the company may cease consumer sales of Roundup as part of settlement talks. Analysts project the settlement could cost Bayer upwards of $12 billion, nearly 20% of the closing price of its Monsanto purchase.
For years, Bayer was at or near the top of the global pesticide business, with roughly $9.2 billion in 2015 sales — a market share of about 24%. At the same time, its seed business was comparatively modest. That changed with Bayer’s buyout of Monsanto, which accounted for about 45% of all seed sales in 2015. Together, analysts estimate, they make up between 25% and 33% of all herbicide sales and as much as 23% of seed sales.
But for all the market share Bayer gained through that acquisition, it’s now in danger of losing billions because of legacy issues it brought aboard in buying Monsanto.
Scroll down to learn more about what’s next for Bayer and get the day’s other top business news from across the state.
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Medicaid expansion could keep rural hospitals from closing, hospital association says
Seven rural hospitals have shut down in Missouri since 2010. The National Rural Hospital Association says a state’s decision not to expand Medicaid is the leading factor contributing to such closures. Medicaid expansion by a state decreases the likelihood of rural hospital closure by 62.3%, according to an association executive. (KRCU)
Stifel rises in U.K. capital deal ranks
Stifel Nicolaus Europe ranked second among all investment banks in U.K. equity capital deal volume in 2019, up from fourth in 2018. The bank captured nearly 10% of the market, raising $1.7 billion for clients across 26 European Common Market deals. (St. Louis Business Journal)
Centene names new general counsel
The Clayton-based managed care provider has named Chris Koster, the former Missouri attorney general, as its new senior vice president, secretary and general counsel. Keith Williamson, the current secretary and general counsel, will become president of the Centene Charitable Foundation. (Bloomberg Law)
Wedding planner to develop $15 million St. Charles hotel
Sherri Steffens, the owner of Heart Events, is replacing The Heart of St. Charles event space with a 117-room Hampton Inn & Suites. Steffens said the hotel is just one part of a development that will include retail and apartments in later phases. (St. Louis Business Journal)
Regional airline buys Chesterfield space, eyes entertainment center
Allegiant, the primary air carrier at MidAmerica St. Louis Airport, recently purchased a Gander Outdoors store in Chesterfield for $4.8 million. The space is expected to house a family entertainment center called Allegiant Nonstop. The centers, which feature go-karts, laser tag, arcade games and more, are part of the company’s effort to boost its profile as leisure brand. (St. Louis Business Journal)
KC aviation department looks to artists for inspiration
Kansas City aviation authorities are looking for up to five local artists to help advise them on how to design the city airport’s new terminal. They will serve on the design planning team for the $1.5 billion airport overhaul, which is subject to Kansas City’s 1% For Art program. (Kansas City Business Journal)
Springfield News-Leader employees establish union
The newspaper’s editorial staff voted 13-0 on Friday to unionize following GateHouse Media’s recent $1.1 billion acquisition of Gannett, the newspaper’s parent company. The combined company owns around 260 daily papers. The Springfield employees originally announced plans to unionize Jan. 6. (Springfield Business Journal)
St. Louis biotechnology startup funder celebrates milestone
The Biotechnology and Life Science Advising Group, founded by Washington University students, turns 5 years old this week. Since it started, it has awarded 100 entrepreneurs over $100,000 in early funding. According to the foundation, 70% of that money has gone to first-time minority entrepreneurs. (St. Louis Public Radio)
Kansas City company fined for toxic chemical release
Harcros Chemicals Inc., based in Kansas City, Kansas, pleaded guilty on Friday for violating the federal Clean Air Act when it released toxic chlorine gas at an Atchison plant in October 2016, causing some 140 people to seek medical help. The company is expected to pay a $1 million fine. (Kansas City Business Journal)
Financial adviser pleads guilty to stealing from elderly clients
Kraig Gier, a financial adviser from Independence, pleaded guilty to stealing over $1 million from two elderly clients, aged 96 and 84, according to the U.S. Attorney’s Office for the Western District of Missouri. Prosecutors say he fraudulently withdrew money from their accounts to wire to his own. (Associated Press)
Say that again
“I was a nervous wreck. I’m more confident this year. I got my crash course out of the way, and I feel more smooth.”
That’s J.T. Payne, widely regarded the best mason in Missouri, who will compete in a national bricklaying competition in Las Vegas called the Spec Mix Bricklayer 500, the St. Louis Post-Dispatch reports. Payne, 27, is expected to lay upward of 800 bricks in one hour as he races to build a 26-foot-long monument to master masonry. When he competed in last year’s event, Payne failed to reach the top 10. But after a year of honing his technique, he’s more confident than before. In September, Payne was declared the winner of the Missouri Regionals qualifying round with a brick count of 692, besting the runner-up contestant by more than a hundred bricks. He and his brother, Jakob, are third-generation masons working for Foeste Masonry in Cape Girardeau. Their grandfather, Kenny Foeste, who started his company in 1973, was inducted into the Masonry Hall of Fame at last year’s World of Concrete event.
That’s how much the Institute for Supply Management’s manufacturing index grew last month, signifying the first month of expansion in the sector since July, the Associated Press reports. The institute said Monday that its index rose to 50.9 in January from 47.8 in December. Anything above 50 signals expansion. The January measure breaks a five-month streak of declining U.S. manufacturing from August through December. That contraction was due, in part, to the U.S. trade war with China, which raised costs for U.S. companies and stoked economic uncertainty. The growth in January, unexpected by economists, was buoyed by a rise in new orders, production and export orders.
Now hearing from a court spokesperson that the Monsanto Roundup St. Louis trial will NOT resume.
Waiting to hear when this trial will resume is like that weird guy on a dating app who keeps getting cold feet about when or IF you two should meet up for a drink.
— Eli Chen (@StoriesByEli) February 3, 2020
That’s the latest from the ongoing Roundup jury trial in St. Louis against agriculture giants Monsanto and Bayer, according to a St. Louis Public Radio reporter. The notice comes after Judge Elizabeth Hogan on Friday indefinitely delayed opening statements in the case to give attorneys on both sides time to negotiate a settlement. The abrupt end to the fourth trial in the months-long courtroom drama has sparked speculation that a settlement deal may be imminent. Ken Feinberg, the court-appointed mediator in the cases, estimates that there are more than 75,000 Roundup cancer claimants, Reuters reports. Analysts say bayer could spend between $8 billion and $12 billion to settle all of the cases, which claim Monsanto’s weedkiller caused the plaintiffs’ cancers, The Wall Street Journal reports.
Hello, my name is
This independent video game developer in Maryland Heights has teamed up with storied publisher Atari to breathe new life into one of its long-running series, the St. Louis Business Journal reports. Graphite Lab, which has 15 in-house employees, developed RollerCoaster Tycoon Story for Atari, which released the game on iOS and Android devices for free on Jan. 30. The new game takes a sharp departure from the classic titles in the franchise, which date back to 1999, when Hasbro Interactive owned the rights. In the past, RollerCoaster Tycoon games focused on allowing the player to build their own theme park and drive up attendance and revenue. In Graphite’s version, players solve puzzles to earn tickets that allow them to build their park. The team is expected to continue working for some time to adjust, improve and expand the game following its recent launch.
It’s been a pleasure doing business with you this morning.