The stock market is always full of surprises. Last week, Bayer shareholders got a shock when the study on the anticoagulant Asundexian was abruptly terminated, causing the share price of Bayer to drop by 19 percent at its peak. This was the biggest crash in share price in at least 32 years.

What exactly happened?

As with many pharmaceutical companies, there are a few medications that are particularly successful for Bayer. The anticoagulant Xarelto and the eye medication Eylea bring in a lot of revenue, but the patents for these successful drugs will soon expire. For many years, investors were skeptical that Bayer would find a new cash cow in time, but then Asundexian started trials.

„Asundexian was the pearl in Bayer’s pharmaceutical pipeline, and without the active ingredient, the pharmaceutical division is left without sustainable growth,“ explained fund manager Markus Manns from the major shareholder Union Investment on tagesschau.de.

Dissolved into thin air: €5 billion in annual sales The active ingredient Asundexian was announced as the next generation for stroke prevention. The drug was to be market-ready by 2026 and used by patients with atrial fibrillation and stroke risk. According to previous statements, Bayer had expected five billion euros in sales annually. This would have been more than any other Bayer medication.

The Phase III study to examine the drug has now been prematurely discontinued due to poor efficacy. According to tagesschau.de, the recommendation comes from an independent observation committee for scientific studies. Previous study results had shown „inferior efficacy“ of the drug compared to the control group.

Bayer announced that it will continue to analyze the data to better understand the result. The Phase III Stroke study with 9,300 test subjects, in which Asundexian is being tested for the prevention of ischemic stroke, is to continue.

More bad news from the US The probable death of Asundexian is a serious blow to the pharmaceutical giant from Leverkusen. Compounding the situation are the bad news surrounding Bayer’s subsidiary Monsanto. According to tagesschau.de, last week a court in Jefferson City, Missouri, sentenced Monsanto to pay damages of more than $1.5 billion. The plaintiffs are cancer patients and attribute their illness to years of use of the controversial weed killer Roundup.

Bayer had taken over the glyphosate manufacturer Monsanto for $63 billion in 2018 and has since been sued by 160,000 alleged victims. The proceedings of 113,000 victims have already been completed. For possible payments to victims, Bayer had set aside $16 billion. The group announced that it would appeal the latest verdict.

How to protect yourself from nasty surprises A study that does not go as expected and claims for damages pose major challenges for Bayer. Fortunately, those investors who were able to sell in time can now consider themselves lucky.

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