Bayer rebuilds pharma while waiting for Monsanto relief

Bayer is preparing for a potential turning point. While the company continues to rebuild its pharmaceutical business through internal programmes, partnerships and external innovation, investors remain focused on the unresolved legal consequences of the 2018 Monsanto acquisition.

A recent transaction with investment firm Apollo gives Bayer additional financial flexibility. The company is contributing its reversible long-acting contraceptives (LARC) business into a newly formed entity in which Apollo-managed funds will acquire a minority stake. Bayer remains the majority owner and retains operational control. The deal provides €3 billion in equity capital without changing the strategic direction of the business.

The additional liquidity comes at a crucial moment. Bayer faces significant financial pressure from the ongoing Roundup litigation in the US, which continues to influence the company’s valuation and strategic options.

Pharma pipeline regains momentum

The legal uncertainty has overshadowed a pharmaceutical business that has been undergoing a significant transformation.

Following the patent expiries of key products such as Xarelto and Eylea, Bayer is rebuilding its pipeline around new growth drivers. Among the company’s important assets are Kerendia, targeting kidney and cardiovascular disease, and Nubeqa, an oncology product for prostate cancer.

At the same time, Bayer is expanding activities in areas including oncology, cardiovascular medicine, cell and gene therapies and radiopharmaceuticals.

A central element of the strategy is external innovation. Through licensing agreements, partnerships and targeted investments, Bayer has increasingly sought access to technologies and programmes developed outside the company. Its venture arm, Leaps by Bayer, continues to invest in technology-driven biotech companies with potential long-term strategic relevance.

Legal uncertainty remains the key factor

Despite progress in the pharmaceutical pipeline, Bayer’s overall performance remains closely linked to the outcome of the Monsanto-related litigation.

The company argues that a recent US Supreme Court decision strengthens its position. The ruling stated that plaintiffs cannot sue Bayer over the absence of a cancer warning label when federal regulations do not require such a warning. The US Environmental Protection Agency (EPA) has repeatedly classified glyphosate as non-carcinogenic and approved labels without such warnings.

Bayer is now seeking to use this ruling to challenge broader groups of federal claims. The company argues that allegations such as negligence or product design defects are closely connected to the labelling issue.

Plaintiffs disagree, arguing that the Supreme Court decision only addresses product labelling and does not eliminate other legal claims.

US District Judge Vincent Chhabria recently reviewed how federal Roundup cases should proceed. He criticised arguments from both sides as insufficient and requested more detailed submissions. A final direction for the proceedings remains open.

Settlement efforts continue

In parallel, Bayer is pursuing a separate settlement strategy for thousands of state-level cases. The proposed settlement framework, valued at around US$7.25 billion, is intended to resolve more than 60,000 similar claims. A Missouri court is expected to review the proposal in August 2026.

A favourable legal outcome could significantly improve Bayer’s financial flexibility and remove one of the biggest uncertainties weighing on the company. A negative outcome would increase pressure on management.

Pharma transformation beyond Monsanto

Regardless of the litigation outcome, Bayer is attempting to reposition pharmaceuticals as a long-term growth driver. The company is investing in new technologies, partnerships and differentiated medicines.

For investors, however, the near-term question remains unchanged: Can Bayer finally move beyond the Monsanto legacy and allow its pharmaceutical strategy to receive the attention it has been building towards?